Tech Leaders Spend $300 Million to Defeat California Asset Tax

More than $300 million has been donated to defeat Proposition 40, a one-time 5 percent tax on the assets of California billionaires. David McCuan, a political science professor at Sonoma State University who tracks state elections, identified the effort as the most expensive ballot measure fight in history. Supporters of the measure have raised only $32 million.

The opposition includes major figures in the technology sector. Donors listed by McCuan 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. Mark Zuckerberg has not contributed directly to the opposition, though his actions influenced Meta’s corporate strategy.

Meta’s SEC filings indicate that Zuckerberg told the company’s board he would purchase a home outside the state to avoid the tax. The board, which includes Xu and Collison, subsequently created a new class of shares. This move allowed Zuckerberg to pay the tax in a way that might otherwise have affected the company's stock price.

Confusion among voters has grown as advertising and mailers flood the state. Brian Galle, a University of California at Berkeley economics professor who helped write the proposal, received a flyer claiming the tax could apply to retirement savings. He stated those claims were not in the original text. Ashley Craig, a volunteer with Patriotic Millionaires, reported hearing from voters that the measure contains secret provisions to tax everyone. Any future changes to the tax would require a two-thirds majority in the state assembly.

Galle described the spending as ironic, noting that the tax aims to make democracy more equal while billionaires use their wealth to avoid it. He cited the Supreme Court’s Citizens United v FEC ruling. Francesco Trebbi, a professor at Berkeley’s Haas School of Business, characterized the contest as "Sergey Brin v millions of Californians" and said it erodes trust in the system.

The measure has exposed a divide within the Democratic Party. The state party endorsed the tax, but Craig said ground support from the party has been limited. McCuan described the vote as 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, whose wealth is estimated at 2.3 trillion dollars, might leave the state. Gubernatorial candidate Xavier Becerra and former congresswoman Katie Porter also oppose the measure.

Opponents have backed two other ballot measures. One bars 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 receives more votes than Prop 40, it could negate the billionaire tax even if voters approve it. A recent Public Policy Institute of California poll found voters narrowly support the tax but also back the two opposing measures. 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, which sponsored the measure, expressed confidence in the campaign. She said 3,000 volunteers have recently been knocking on doors and distributing flyers. Senator Bernie Sanders and Congressman Ro Khanna have rallied support across the state. McCuan suggested that a defeat could benefit backers, who might blame moderates and target big tech in future races.