California Opponents Expend $300 Million Against Prop 40

California voters will determine on November 3 whether to approve a one-time 5 percent tax on the assets of state billionaires. The measure, designated as Prop 40, has triggered the most expensive campaign for a state ballot initiative in history, according to David McCuan, a political science professor at Sonoma State University who monitors state and local elections.

Donors opposing the tax have contributed more than $300 million to defeat the proposal. The group includes 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 of the tax have raised only $32 million.

Mark Zuckerberg, founder of Meta, has not donated directly to the opposition. However, Meta's SEC filings indicate he informed the company's board, which includes Xu and Collison, that he intended to purchase a home outside the state to avoid the tax. The board subsequently created a new class of shares for Zuckerberg to use for payment, a move designed to prevent potential fluctuations in Meta's stock price.

The volume of advertising and mailers has caused confusion among some voters. Brian Galle, an economics professor at the University of California at Berkeley who helped draft the proposal, received a flyer claiming the tax could apply to anyone, including their retirement savings. Galle stated that such claims were not present in the original text. Ashley Craig, a volunteer with the pro-tax organization Patriotic Millionaires, reported that voters frequently cite secret provisions that would tax everyone. She noted that any modification to the tax requires a two-thirds majority in the assembly and must remain faithful to the spirit of the measure.

Galle argued that the expenditure illustrates the inequality the tax seeks to address. "The irony is that Prop 40 is meant to make democracy more equal, but the billionaires are using their money to avoid that," he said, referencing the Supreme Court's Citizens United v FEC ruling. Francesco Trebbi, a professor at Berkeley's Haas School of Business, described the contest as "Sergey Brin v millions of Californians," noting that it erodes trust in the system.

The dispute reflects a division within the Democratic Party. The state party has endorsed the tax, but Craig reported receiving limited ground support from it. McCuan characterized the measure as a test between progressives and moderates, suggesting that a victory could encourage progressive candidates to propose similar ideas in the 2028 presidential race. Governor Gavin Newsom, who is considering a 2028 run, opposes the tax, calling it "poorly written" and warning it would harm the state if billionaires, whose wealth the authors estimate at 2.3 trillion, depart. Gubernatorial candidate Xavier Becerra and former congresswoman Katie Porter also oppose the measure.

Opponents have also funded two additional ballot measures. One would bar 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 measure 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 that voters narrowly support the tax, though 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, placing the burden on the yes side. He plans to conduct another poll as voters receive state guides explaining the measures.

Suzane Jiminez, chief of staff at the SEIU health workers union, which sponsored the measure, expressed confidence in the campaign. She stated that 3,000 volunteers have recently been canvassing and distributing flyers, and that 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.