California Billionaire Tax Faces Over $300 Million Opposition Campaign Ahead of November 3 Vote

San Francisco: Voters in the US state of California will vote on November 3 on a proposal to impose a one-time 5 percent tax on the assets of the state's billionaires. Opponents of the proposal have already raised more than $300 million.

Brian Galle, an economics professor at the University of California, Berkeley, is a co-author of the proposed tax. He recently found a flyer about the proposal in his mailbox. Reading it, he found things he had not written, including that the tax could apply to anyone and even to their retirement savings.

Many Californians like Galle are now receiving such flyers and watching similar ads. Voters will decide in the November 3 election whether to impose the one-time 5 percent tax on the assets of the state's billionaires. The proposal is known as Proposition 40.

David McCuan, a professor of political science at Sonoma State University who tracks state and local elections, said the billionaires' spending to oppose the tax has made this the most expensive ballot measure ever and among the most expensive campaigns of this midterm.

Tech billionaires who have donated to block the tax 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. Their donations total more than $300 million.

Meta founder Mark Zuckerberg has not donated to oppose the tax. But Meta's SEC filings revealed he told the company's board he would buy a home outside California to avoid paying the tax. The board then created a new class of shares that Zuckerberg could use to pay the tax.

Supporters of the tax have raised only $32 million. That is far less than the opponents' money, and the report said the ubiquitous ad campaign and voter outreach have been driven by the billionaire fundraising.

Ashley Craig, a volunteer for Patriotic Millionaires, a group that supports the tax, has spent months door knocking and making calls to voters. She said she often hears misinformation. Voters often tell her the tax has secret provisions allowing everyone to be taxed, which is not entirely true, she said.

The report said any change to the tax would require a two-thirds majority in the assembly and would need to stay true to the spirit of the tax. But the prevalence of the ads has meant voters often tell Craig the tax would soon include her, and them.

Galle, the proposal's co-author, said the irony is that Proposition 40 is meant to make democracy more equal, but the billionaires are using their money to avoid that. He cited the US Supreme Court's Citizens United v FEC judgement, which gave companies and special groups freedom to spend freely in elections.

Francesco Trebbi, a professor at the University of California, Berkeley's Haas School of Business, said this has led to a situation where Sergey Brin has far more of a political voice. In his words, it is Sergey Brin versus millions of Californians, and this leads people to lose trust in the system.

Craig said the state Democratic Party has endorsed the tax proposal, but she has not had ground support from the party. McCuan attributed this to the Democratic Party's internal rift between progressives and moderates, with progressives in favour of such a policy and moderates resisting it. He said this is a broader proxy test, and if it works, progressive candidates could try such ideas in the 2028 presidential elections.

California Governor Gavin Newsom has opposed the tax, saying it is poorly written and would harm the state if its billionaires, whose wealth is estimated at $2.3 trillion according to the measure's authors, move. Xavier Becerra, the Democratic candidate for governor, and former congresswoman Katie Porter, who also ran for governor, have also opposed it.

Opponents have also backed two other ballot measures. One prohibits any new state taxes based on personal property or imposed retroactively. Another asks state auditors to review proposed tax measures for their financial impact before they are voted on. If these pass and get more votes than the billionaire tax, they could negate the billionaire tax even if it passes.

A recent poll by the Public Policy Institute of California (PPIC) found voters support the tax by a small margin, but also support the two measures that oppose it. Mark Baldassare, PPIC's statewide survey director, said only about a third of such citizen initiatives pass, so the burden is on the yes side, and support can decline if people do not feel completely sure.

Suzane Jiminez, chief of staff at the SEIU health workers union, which sponsored the measure, said they are confident they will have the votes, and when voters see billionaires are funding the ads, they see through them. Senator Bernie Sanders of Vermont and Congressman Ro Khanna of California rallied across the state for the measure. Jiminez said 3,000 volunteers have spread out in recent weeks to knock on doors and distribute flyers.