Silicon Valley Spends $425 Million to Block Billionaire Tax

California voters rejected a one-time 5% tax on billionaires and passed a measure banning future wealth taxes in a result driven by a massive spending campaign.

Proposition 40 is expected to lose by double-digit margins. The measure sought to raise revenue to offset healthcare losses from the One Big Beautiful Bill Act. Voters also approved Proposition 42, an initiative placed on the ballot by Sergey Brin and other ultra-wealthy individuals. This new law prohibits the state from taxing billionaire wealth.

Campaign finance filings show that Silicon Valley executives raised nearly $425 million to defeat the tax. This total marks the most expensive opposition campaign in state history. Sergey Brin, co-founder of Google, was the largest single donor with at least $132 million. Eric Schmidt, former Google CEO, contributed more than $48 million. Other donations came from leaders at Palantir, DoorDash, Stripe, and Reddit.

The opposition used these funds to distribute high-production advertisements and mailers over the final month. These materials described Proposition 40 as an "everyone tax" and a "reckless experiment." The pro-tax campaign, sponsored by SEIU-United Healthcare Workers West, raised just over $31 million. This funding disparity meant the union was outspent nearly 14 to 1.

Political leaders added to the challenge for the tax measure. Governor Gavin Newsom and Governor-elect Xavier Becerra both opposed targeting billionaires. Suzanne Jimenez, chief of staff for the union, stated that billionaire-funded propaganda might mislead voters in the short term. She added that the truth about reduced services and closed emergency rooms would eventually become harder to hide.

Voting patterns showed a clear geographic split. Counties that supported the tax were typically more Democratic and home to many wealthy residents. These areas included Los Angeles, San Francisco, and other Bay Area locations. Counties that rejected the measure were mostly rural, poor, and red. In some of these areas, up to 80% of voters voted no on the proposition, even as they voted for Democratic candidates in U.S. House races.

Tech industry leaders praised the outcome on social media. Garry Tan, CEO of Y Combinator, posted, "Huge thanks to Sergey Brin here." David Marcus, a crypto entrepreneur, called Brin a "Hero." Union leaders indicated the fight is not over. Jimenez said healthcare workers will pursue every available avenue if the state fails to protect patients. This includes the possibility of returning to the ballot in 2028 with a new initiative.