Tech founders spend $300 million to block California asset tax

The race to decide California's one-time 5 percent tax on billionaire assets has become the costliest ballot measure fight in state history. David McCuan, a political science professor at Sonoma State University, identified the campaign against Prop 40 as the most expensive in his tracking of state and local elections.

The opposition has raised more than $300 million since the campaign launched. Key donors include Google co-founder Sergey Brin, DoorDash founder Tony Xu, Stripe co-founder Patrick Collison, Ripple co-executive chairman Chris Larsen, and venture capitalists John Doerr, Michael Moritz, and Vinod Khosla. In contrast, supporters have collected only $32 million.

Mark Zuckerberg did not donate personally, but Meta filings revealed he told the board he would buy a home outside California to avoid the tax. The board created a new class of shares for him to use in payment, a move that could influence the company's stock price. The heavy ad and mailer campaigns have generated voter confusion. Brian Galle, a Berkeley economics professor who helped draft the proposal, received a flyer claiming the tax applies to retirement savings, a detail he said was not in the original text. Ashley Craig, a volunteer for Patriotic Millionaires, said voters frequently ask about secret provisions that might tax everyone.

Critics argue the spending highlights the inequality the tax intends to fix. Galle noted that billionaires are using wealth to avoid a measure designed to make democracy more equal, citing the Supreme Court's Citizens United v FEC ruling. Francesco Trebbi, a professor at Berkeley's Haas School of Business, described the contest as a clash between Sergey Brin and millions of Californians that erodes public trust.

The fight has exposed divisions within the Democratic Party. While the state party endorsed the tax, Craig said ground support from the party has been limited. McCuan views the measure as a proxy test between progressives and moderates, noting a victory could encourage similar ideas in the 2028 presidential race. Governor Gavin Newsom, who opposes the tax, called it poorly written and warned it could drive away billionaires whose combined wealth is estimated at 2.3 trillion dollars. Candidates Xavier Becerra and Katie Porter also oppose the measure.

Opponents have also backed two other ballot measures: one barring new or retroactive state taxes on personal property, and another requiring state auditors to review tax measures' financial impact before voting. If either passes with more votes than Prop 40, 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 also back the two counter-measures. Mark Baldassare, the institute's survey director, noted that only about a third of citizen initiatives pass, placing the burden on the yes side. He plans to poll again as voters receive state guides.

Suzane Jiminez, chief of staff at the SEIU health workers union, expressed confidence in the campaign. She reported that 3,000 volunteers are currently knocking on doors, and that Senator Bernie Sanders and Congressman Ro Khanna have rallied support statewide. McCuan suggested that even a defeat could benefit backers, who could then blame moderates and target big tech in future elections.