Voters face $300 million campaign to stop asset tax

California voters will choose on November 3 whether to approve a one-time 5 percent tax on the assets of billionaires. The campaign to defeat the measure, known as Proposition 40, has become the most expensive ballot fight in state history. Opponents have raised more than $300 million, while supporters have collected only $32 million.

The opposition group includes prominent technology figures. Google co-founder Sergey Brin, DoorDash founder Tony Xu, and Stripe co-founder Patrick Collison are among the donors. Venture capitalists John Doerr, Michael Moritz, and Vinod Khosla have also contributed. Mark Zuckerberg, the founder of Meta, has not donated directly to the campaign. However, Meta filings show he told the board he would move outside the state to avoid the tax. The board created a new class of shares to help him pay the tax without affecting the stock price.

The heavy spending has generated extensive advertising and mailers that some voters find confusing. Brian Galle, an economics professor at the University of California, Berkeley, helped write the proposal. He received a flyer claiming the tax could apply to anyone, including those with only retirement savings. Galle stated that those claims were not in the original text. Ashley Craig, a volunteer for the pro-tax group Patriotic Millionaires, reports hearing similar concerns. Any future changes to the tax would require a two-thirds majority in the state assembly.

Political analysts view the spending as a test of power. Galle noted that the measure aims to make democracy more equal, yet billionaires are using their wealth to resist it. He referenced the Supreme Court's Citizens United ruling. Francesco Trebbi, a professor at Berkeley's Haas School of Business, described the contest as Sergey Brin versus millions of Californians. He said the dynamic erodes public trust in the system.

The fight has also caused a split among Democrats. The state party endorses the tax, but Craig said she has received little ground support from it. David McCuan, a political science professor at Sonoma State University, called the measure a proxy test between progressives and moderates. Governor Gavin Newsom, who is considering a 2028 presidential run, opposes the tax. He called it poorly written and warned that billionaires might leave the state. His estimated total wealth is 2.3 trillion dollars.

Opponents support 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 before a vote. If either measure passes with more votes than Proposition 40, it could negate the billionaire tax even if voters approve it.

A recent Public Policy Institute of California poll found that voters narrowly support the tax. They also support the two measures designed to stop 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 explaining the measures.

Suzane Jiminez, chief of staff at the SEIU health workers union, said the measure has 3,000 volunteers knocking on doors. Senator Bernie Sanders and Congressman Ro Khanna have rallied support across the state. McCuan suggested that even a defeat could benefit backers by allowing them to blame moderates and target big tech in future elections.