California is witnessing a high-stakes campaign as its wealthiest residents pour tens of millions of dollars into a political action committee to stop a proposed one-time wealth tax. The measure, known as Proposition 40, would levy a 5% charge on residents whose net assets exceed $1 billion, with the revenue earmarked for the state's healthcare system.
Billionaire contributions swell to $40 million
The group behind the opposition, Building a Better California, has attracted a fresh wave of funding. Venture capitalist John Doerr donated $7.5 million, while Chris Larsen, executive chair of blockchain firm Ripple, added $10 million, according to a campaign-finance filing. Doerr's net worth is estimated at $22.6 billion and Larsen's at $11.4 billion. Other donors include Lookout co-founder John Hering ($946,000) and Greenoaks Capital founder Neil Mehta ($250,000).
By late June the PAC's endowment had reached $110 million, signalling the seriousness with which California's billionaires view the tax threat.
Public opinion remains split
A poll conducted by the University of California, Berkeley's Institute of Governmental Studies surveyed more than 4,000 registered voters. It found 48% of likely voters support Proposition 40, while 41% oppose it. Among Democrats, support is strong, but only half of unaffiliated voters back the tax and 80% of Republicans reject it.
"These results suggest that the Billionaires Tax initiative is shaping up to be a closely fought contest, with the key question being whether opponents can make big enough inroads among the state's traditionally Democratic-leaning voters," said Eric Schickler, co-director of the Institute of Governmental Studies.
Counter-propositions aim to neutralise the tax
Building a Better California has also sponsored two rival measures, Proposition 41 and Proposition 42. Proposition 41 would require the state auditor to review any special tax proposal before it appears on a ballot. Proposition 42 would prohibit new taxes based solely on asset ownership, such as property held without a sale.
Awareness of these counter-initiatives is low; the same poll showed fewer than a third of voters knew they existed, even though 72% had heard of the billionaire tax.
Political dynamics ahead of November
Governor Gavin Newsom and Democratic gubernatorial candidate Xavier Becerra have publicly opposed the tax, yet the California Democratic Party endorsed the measure, complicating the political calculus for opponents.
Among the dissenting billionaires, Google co-founder Sergey Brin has been especially vocal. He relocated many of his assets out of the state last year and has contributed $102 million to the anti-tax effort, including a recent $20 million donation to Building a Better California.
"IMO, if this passes, only idiot startup founders stay in Cali," wrote Mark Cuban on X, warning that the tax could harm entrepreneurship.
Senator Bernie Sanders of Vermont continues to champion a similar wealth tax at the federal level, arguing it would demonstrate that the richest Americans still have a duty to the broader society. In March, Sanders and Representative Ro Khanna introduced the "Make Billionaires Pay Their Fair Share Act," which would impose a 5% tax on the nation's 938 billionaires to fund Medicare, reverse Medicaid cuts, and provide a $3,000 payment to households earning under $150,000.
What lies ahead?
With $87 million already earmarked for advertising and the ballot set for November, the battle over Proposition 40 is poised to intensify. Voter awareness of the counter-propositions will likely be a decisive factor, as will the ability of the billionaire-backed PAC to sway undecided voters in a state that traditionally leans Democratic.