Tech Donors Outspend Prop 40

A $300 million war chest is clashing with a $32 million movement in the most expensive state ballot fight in history. The spending gap defines the campaign for Proposition 40, which asks California voters to approve a one-time 5 percent tax on the assets of the state's billionaires. David McCuan, a political science professor at Sonoma State University, identified the measure as the costliest contest in state and local election records.

The opposition has aggregated over $300 million in donations. Major contributors 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. The pro-tax side has raised only $32 million. Mark Zuckerberg did not donate to the opposition, but Meta SEC filings reveal he told the board he would purchase a home outside the state to avoid the levy.

The board, which includes Xu and Collison, created a new class of shares for Zuckerberg to pay the tax. This move aimed to prevent a potential impact on Meta's stock price. The massive influx of advertising has created voter confusion. Brian Galle, a UC Berkeley economics professor who helped draft the proposal, received a flyer claiming the tax could apply to retirement savings. Galle stated those claims were not in his text. Ashley Craig, a volunteer with Patriotic Millionaires, reports hearing from voters about secret provisions that would tax everyone.

Galle described the spending as a demonstration of the inequality the tax targets. He noted that billionaires are using their wealth to avoid the equalization Prop 40 seeks to provide, referencing the Supreme Court's Citizens United ruling. Francesco Trebbi, a professor at Berkeley's Haas School of Business, characterized the contest as a battle between Sergey Brin and millions of Californians. He argued the dynamic erodes trust in the system.

The race highlights a split within the Democratic Party. The state party endorsed the tax, though Craig said ground support from the party has been limited. McCuan views the measure as a test between progressives and moderates. A victory could encourage progressive candidates to pursue similar ideas in the 2028 presidential race. Governor Gavin Newsom, who is considering a 2028 run, opposes the tax. He called it poorly written and warned it could drive billionaires, whose estimated wealth totals $2.3 trillion, out of the state. Gubernatorial candidate Xavier Becerra and former congresswoman Katie Porter also oppose the measure.

Opponents backed two additional ballot measures. One bars new state taxes on personal property or retroactive taxes. The other requires state auditors to review proposed tax measures for financial impact before a vote. If either measure passes with more votes than the billionaire tax, it could negate the tax even if voters approve Prop 40. A recent Public Policy Institute of California poll found narrow voter support for the tax, but also support for the two blocking measures. Mark Baldassare, the institute's statewide survey director, noted that only about one-third of citizen initiatives pass, placing the burden on the yes side.

Suzane Jiminez, chief of staff at the SEIU health workers union, expressed confidence in the campaign. She reported that 3,000 volunteers are knocking on doors and distributing flyers. Senator Bernie Sanders and Congressman Ro Khanna have rallied support across the state. McCuan suggested that even a defeat could benefit the backers, who could blame moderates and target big tech as a political bogeyman.