Ballot Box: $300 Million Campaign Challenges California's One-Time Wealth Tax

California voters face a choice on November 3 that pits the state's wealthiest residents against a proposed one-time 5 percent tax on their assets. The decision will determine whether billions of dollars in new revenue flow into the state budget or if the status quo remains for the roughly 200 billionaires who reside there.

David McCuan, a political science professor at Sonoma State University, calls this the most expensive ballot measure fight in history. Opponents have donated more than $300 million to defeat the measure, known as Prop 40. Supporters have raised only $32 million. That ratio of 10 to 1 represents a massive financial disparity in a single state election.

The opposition includes high-profile figures such as Google co-founder Sergey Brin, DoorDash founder Tony Xu, and Stripe co-founder Patrick Collison. Venture capitalists John Doerr, Michael Moritz, and Vinod Khosla are also major contributors. Notably, Meta founder Mark Zuckerberg has not donated to the opposition, though his company's filings reveal he told the board he would buy a home outside the state to avoid the tax. The board then created a new class of shares for him to use for payment.

The heavy spending has created confusion among voters. Brian Galle, a Berkeley economics professor who helped write the proposal, said a flyer he received claimed the tax could apply to retirement savings. He stated those claims were not in his text. Ashley Craig, a volunteer with Patriotic Millionaires, said she frequently hears from voters who believe the measure has secret provisions. Any change to the tax would require a two-thirds majority in the assembly.

Galle argued that the spending demonstrates the very inequality the tax seeks to fix. He noted, "The irony is that Prop 40 is meant to make democracy more equal, but the billionaires are using their money to avoid that." Francesco Trebbi, a professor at Berkeley's Haas School of Business, described the contest as "Sergey Brin v millions of Californians," saying it erodes trust in the system.

The fight highlights a split among Democrats. The state party has endorsed the tax, but Craig said she has received little ground support from it. Governor Gavin Newsom, who is eyeing a 2028 run, opposes the tax, calling it "poorly written." He warned it would harm the state if billionaires, whose wealth the authors estimate at 2.3 trillion, leave. Gubernatorial candidate Xavier Becerra and former congresswoman Katie Porter also oppose it.

Opponents have backed two other ballot measures to block the tax. One bars new state taxes on personal property or those imposed retroactively. The other requires state auditors to review proposed tax measures for financial impact before a vote. If either passes with more votes than the billionaire tax, it could negate the tax even if voters approve it. A recent Public Policy Institute of California poll found voters narrowly support the tax, but they also back the two measures aimed at stopping it.

Suzane Jiminez, chief of staff at the SEIU health workers union which sponsored the measure, said she feels confident. She noted that 3,000 volunteers have recently been knocking on doors and distributing flyers. Senator Bernie Sanders and Congressman Ro Khanna have rallied support across the state. McCuan suggested that even a defeat could benefit backers, who could blame moderates and target big tech as a political bogeyman.