California Ultra-Rich Fight World's First Billionaire Tax
California billionaires raise $340m to block proposed 5% wealth tax.
In brief
California billionaires raise $340m to block proposed 5% wealth tax. California tech billionaires raised $340 million to defeat Proposition 40, a one-time 5% wealth tax that would fund healthcare and education. Originally reported by mint.
California Ultra-Rich Prepare to Fight Tax
California tech billionaires have reportedly raised more than $340 million to defeat 'Proposition 40', a one-time 5 percent wealth tax that will fund healthcare and education.
Proposition 40 Details
Californians will vote on Proposition 40 in early November. If passed, it would require a one-time 5 per cent tax on the state’s billionaires with proceeds mostly funding healthcare programs, along with some education and…
Tax Targets Net Worth
Proposition 40 'imposes 5% tax on certain taxpayers with assets over $1 billion.' The proposed tax targets an individual’s entire net worth and applies to billionaires who have resided in California since Jan. 1, 2026.
Political Divide
The measure has divided Democrats in California, with some supporting it and others rejecting it because it’s a one-time levy that funds only certain healthcare programs.
Prop 40 as National Model
California has more billionaires than any other state, so Prop 40 is seen as setting the stage for wealth tax referendums in more states across the country.
Who Supports Prop 40
Supporters include US Senator Bernie Sanders, California congressman Ro Khanna, and the SEIU United Healthcare Workers West.
Who Opposes Prop 40
Opponents include the California Primary Care Association, California School Boards Association, California Taxpayers Association, and tech billionaires.
Legal Strategy
The California Business Roundtable, representing tech and energy companies, has retained Elizabeth Prelogar, the Biden Administration’s top lawyer at the US Supreme Court, to lead legal challenges against Prop 40.
Legal Strategy Details
The group plans to file a legal challenge immediately after the election if needed, using the Moore v. United States case to establish constitutional limits on wealth taxation.
Campaign Spending
The campaign fighting Prop 40 reportedly spends more than $1 million a day and has raised at least $700,000 through its political arm.
Ad Campaign Strategy
The campaign uses ads featuring the president of the California Medical Association saying the tax does not improve healthcare and claims teachers, carpenters, and firefighters oppose it.
Silicon Valley Donors
The biggest donor is Google co-founder Sergey Brin, who has contributed at least $102 million, followed by Eric Schmidt with over $42 million.
Polling Results
Recent polling shows 45% of voters likely to support Prop 40 with 42% voting against it, a sharp decline from a 7% lead earlier in the month.
Countermeasures
Propositions 41 and 42 on the November ballot could stop Prop 40 from taking effect if they receive more yes votes than Prop 40.
The takeaway
California tech billionaires raised $340 million to defeat Proposition 40, a one-time 5% wealth tax that would fund healthcare and education.
