Tech billionaires have raised more than $340m to defeat a proposed wealth tax in California, the Guardian reported on Thursday. The opposition campaign is spending more than $1m per day to fight Proposition 40, a ballot measure that would impose a one-time 5% tax on the state's billionaires.
During the first 19 days of September, the opposition campaign spent at least $21.2m, according to state financial disclosures. The funds are paying for robotexts, mailers and advertisements warning that a tax on billionaires would expose all Californians to higher taxes.
Google co-founder Sergey Brin has contributed at least $102m to fight the tax, making him the biggest donor. Former Google CEO Eric Schmidt has donated more than $42m. Other donors include Palantir co-founder Peter Thiel, DoorDash CEO Tony Xu, Stripe CEO Patrick Collison and crypto magnate Chris Larsen. The yes campaign has raised just under $33m, mostly from the healthcare union sponsoring the measure.
California voters will decide on Proposition 40 in early November. If passed, the measure would direct proceeds mostly to healthcare programmes, along with some education and food assistance. The state's major unions and politicians including Vermont senator Bernie Sanders and California congressman Ro Khanna back the proposal. Both the Democratic and Republican candidates for governor oppose it, as does Planned Parenthood Affiliates of California.
Two countermeasures, Propositions 41 and 42, have been placed on the November ballot by opponents. If either receives more yes votes than Proposition 40, they will stop the billionaire tax from taking effect even if it passes. A late-September poll by the University of California showed 45% of voters likely to vote yes on the tax with 42% voting no. A month earlier, the proposal enjoyed a 7% lead.
The opposition campaign has placed advertisements featuring the president of the California Medical Association, René Bravo, who says the measure would not improve healthcare. Similar advertisements claim teachers, carpenters and firefighters also oppose the wealth tax, calling it a dangerous experiment. The messaging centres on how the tax would hurt doctors, teachers, small businesses, working families and public safety, without mention of the state's billionaires.
The three campaigns against the wealth tax draw nearly all of their funding from Super Pacs loaded with Silicon Valley money, according to campaign finance filings. Since July, the committees opposing Proposition 40 and supporting Propositions 41 and 42 have received a total of more than $297.8m, most of that from a Super Pac called Building a Better California. The billionaires have found themselves in alliance with several healthcare, education, construction and public safety unions and associations.
Why it matters for wealth
California has more billionaires than any other US state. Proponents and opponents are treating Proposition 40 as a potential first step towards wealth taxes in more states, which could reshape tax planning for high-net-worth individuals across the country.
Source: The Guardian
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