Tech Founders Back $300 Million Campaign to Block California's 5% Asset Tax

Donors including Google co-founder Sergey Brin and Doordash founder Tony Xu have contributed more than $300 million to defeat Proposition 40, a proposed one-time 5% tax on the assets of California billionaires. This fundraising total is ten times the amount raised by the measure's backers, who have collected $32 million. David McCuan, a political science professor at Sonoma State University who tracks state and local elections, identified this as the most expensive ballot measure in California history.

The disparity in spending has fueled an aggressive advertising campaign that has saturated the state. Brian Galle, an economics professor at the University of California, Berkeley and a co-author of the tax proposal, described receiving mailers that contained inaccuracies he did not write. One such flyer claimed the tax could apply to anyone, including retirement savings. Galle noted that the irony lies in the measure's intent to equalize democracy while the wealthiest individuals use their capital to prevent that outcome.

Mark Zuckerberg, founder of Meta, has not personally donated to the opposition. However, SEC filings indicate he informed the company's board, which includes Doordash founder Tony Xu and Stripe co-founder Patrick Collison, of his plan to purchase a home outside California to avoid the tax. The board subsequently created a new class of shares that could allow Zuckerberg to pay the tax without selling his stake. This move highlighted how the proposal affects corporate governance and stock structures.

Supporters of the measure face challenges beyond financial outspending. Ashley Craig, a volunteer for the group Patriotic Millionaires, reported that voters often cite misinformation regarding secret provisions in the tax. Although changing the tax would require a two-thirds majority in the state assembly, the prevalence of negative ads has led many to believe the tax will soon apply to them. Craig expressed frustration at feeling isolated in the campaign arena despite endorsement from the state Democratic Party.

The Democratic Party's support for Proposition 40 is complicated by internal divisions. Governor Gavin Newsom, who is considering a 2028 presidential run, opposes the measure. He criticized the tax as poorly written and warned it could harm the state if billionaires with an estimated combined wealth of $2.3 trillion relocate. Xavier Becerra, the Democratic candidate for governor, and former congresswoman Katie Porter have also voiced opposition. McCuan described the vote as a proxy battle between progressive and moderate factions within the party.

Opponents have also placed two additional measures on the ballot. One would prohibit new state taxes based on personal property or imposed retroactively. The other requires state auditors to review financial impacts before any tax measure is voted on. If these measures pass and receive more votes than Proposition 40, they could negate the billionaire tax even if it succeeds.

Recent polling by the Public Policy Institute of California shows voters support the tax by a small margin, while also supporting the two opposing measures. Mark Baldassare, the institute's statewide survey director, noted that only about one-third of citizen initiatives pass. He warned that support can decline if voters lack certainty. Suzane Jiminez, chief of staff for the SEIU health workers union which sponsored the measure, stated that the union feels confident in securing the necessary votes. She argued that voters see through the ads funded by billionaires.

In the final weeks before the election, 3,000 volunteers have engaged in door knocking and distributed explanatory flyers across the state. Senator Bernie Sanders of Vermont and California Representative Ro Khanna have also campaigned in support of the measure. Jiminez maintained that Democratic figureheads support the rank and file efforts, despite the opposition from party leadership. McCuan suggested that the historic spending by opponents serves as a win for progressives, providing a narrative to criticize big tech in future political battles.