California Tech Leaders Spend $300 Million to Block New Asset Tax

California voters will decide on November 3 whether to pay a one-time 5 percent tax on the assets of residents worth at least $1 billion. The campaign against the measure, known as Proposition 40, has become the most expensive ballot fight in state history. Political science professor David McCuan of Sonoma State University tracks the spending and reports that opponents have raised more than $300 million. Supporters have collected only $32 million.

The opposition includes high-profile tech figures. 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 all donated to the no campaign. Meta founder Mark Zuckerberg did not contribute directly. However, Meta SEC filings show he informed the board that he would purchase a home outside the state to avoid the levy. The board created a new class of shares to help him pay the tax without affecting the company's stock price.

The heavy spending has generated widespread advertising and mailers. Brian Galle, an economics professor at the University of California at Berkeley who helped write the proposal, said a flyer he received claimed the tax could apply to retirement savings. He noted those claims were not in his original text. Ashley Craig, a volunteer with the pro-tax group Patriotic Millionaires, said voters frequently report hearing that the measure contains secret provisions taxing everyone. Any changes to the tax would require a two-thirds majority in the state assembly.

Galle said the spending illustrates the inequality the tax aims to address. He noted that the billionaires are using their wealth to avoid the measure. Francesco Trebbi, a professor at Berkeley's Haas School of Business, described the contest as a battle between Sergey Brin and millions of Californians. He said the situation erodes trust in the system. The fight has also split Democrats. The state party endorsed the tax, but Craig said she received little ground support from it.

Governor Gavin Newsom opposes the tax. He called it poorly written and warned it could harm the state if billionaires leave. Gubernatorial candidate Xavier Becerra and former congresswoman Katie Porter also oppose it. Opponents backed two other ballot measures. One bars new state taxes on personal property or retroactive taxes. The other requires state auditors to review proposed tax measures for financial impact. If either passes with more votes than the billionaire tax, it could negate the levy even if voters approve it.

A recent Public Policy Institute of California poll found voters narrowly support the tax. They also back the two measures aimed at stopping it. Mark Baldassare, the institute's statewide survey director, noted that only about a third of citizen initiatives pass. He plans to poll again as voters receive state guides. Suzane Jiminez, chief of staff at the SEIU health workers union, said she feels confident. She reported that 3,000 volunteers are knocking on doors. Senator Bernie Sanders and Congressman Ro Khanna have also rallied support across the state.