Tech Founders Back $300 Million Campaign Against California One-Time Tax

Silicon Valley leaders have raised more than $300 million to defeat California's proposed one-time 5 percent tax on billionaire wealth. The measure, known as Prop 40, appears on the ballot for the November 3 election. David McCuan, a political science professor at Sonoma State University, identified this as the most expensive ballot measure campaign in state history.

The opposition includes Google co-founder Sergey Brin, DoorDash founder Tony Xu, and Stripe co-founder Patrick Collison. Venture capitalists John Doerr, Michael Moritz, and Vinod Khosla have also contributed funds. Chris Larsen, co-executive chairman of Ripple, is part of the group fighting the tax. Together, these individuals have outspent supporters by nearly ten to one.

Supporters of the tax have collected $32 million. This disparity has generated intense advertising and mail campaigns. Some voters reported receiving conflicting information about who the tax covers. Brian Galle, a Berkeley economics professor who helped draft the proposal, noted that a recent flyer claimed the tax could apply to retirement savings. Galle stated that his original text did not contain such provisions.

Mark Zuckerberg, founder of Meta, has not donated to the opposition. However, Meta's SEC filings indicate he informed the board of his intent to purchase a home outside California to avoid the tax. The board subsequently created a new class of shares to manage potential stock price impacts from his move. Board members Tony Xu and Patrick Collison are active in the anti-tax campaign.

Critics argue the spending highlights the measure's intent. Galle stated that the irony is evident when billionaires use wealth to oppose a tax meant to balance democratic power. He referenced the Supreme Court's Citizens United v FEC ruling in this context. Francesco Trebbi, a professor at Berkeley's Haas School of Business, described the contest as a clash between Brin and millions of Californians. He said this dynamic erodes public trust in the system.

The tax has created divisions within the Democratic Party. The state party endorsed Prop 40, but Ashley Craig, a volunteer with Patriotic Millionaires, said she received little ground support from the organization. McCuan views the measure as a test between progressive and moderate factions. A victory could encourage similar ideas in the 2028 presidential race.

Governor Gavin Newsom opposes the tax. He called the text poorly written and warned that a loss of billionaires, who hold an estimated $2.3 trillion in wealth, would hurt the state. Gubernatorial candidate Xavier Becerra and former congresswoman Katie Porter also support the no side. Two other ballot measures back the opposition. One bars retroactive property taxes, and the other requires state auditor reviews for financial impact.

If either of these companion measures passes with more votes than Prop 40, it could invalidate the billionaire tax even if voters approve it. A recent Public Policy Institute of California poll shows voters narrowly support the tax but also back the blocking measures. Mark Baldassare, the institute's survey director, noted that only about a third of citizen initiatives pass. He plans to conduct another poll as state guides reach voters.

Suzane Jiminez, chief of staff for the SEIU health workers union, expressed confidence in the campaign. She said 3,000 volunteers are currently knocking on doors and distributing flyers. Senator Bernie Sanders and Congressman Ro Khanna have also campaigned for the tax. McCuan suggested that even a defeat could benefit backers by allowing them to target big tech and moderate Democrats as political adversaries.