More than $351 million in political donations went into a high-stakes campaign around a proposed wealth tax on the November ballot, making it one of the most expensive campaigns in California history.
About 90% of the money is being spent to defeat a statewide initiative to impose a new tax on billionaires’ assets, a multifaceted opposition effort funded primarily by ultra-wealthy Californians and targeted by a measure its supporters call an economic takeover.
Proposition 40, the Billionaires Tax, would levy a one-time 5% tax on many assets of California billionaires who lived in the state as of January 1.
Millions of dollars continue to flow into the campaigns of three intertwined ballot initiatives at the center of the debate: Proposition 40, as well as Propositions 41 and 42, which would neutralize Proposition 40 through strategic and esoteric tax law changes.
“The pro-40 campaign chose fight, and then came to this fight with a butter knife versus a nuclear arsenal,” said Republican Party strategist Rob Stutzman, who is not involved in any of the wealth tax-related ballot measures. “Because they are so well funded, in today’s multifaceted media world, they are able to appear everywhere from network television to video games. That’s a very, very big advantage that few campaigns can have.”
But, Stutzman warned, money does not guarantee victory.
In the most expensive election fights in California history, $463 million was spent on two gambling proposals in 2022. The initiatives pitted some of California’s most successful Native American tribes with gaming interests against gambling companies, including online sports gaming companies DraftKings and FanDuel. The measures taken by both parties failed.
People attend a rally against Proposition 40 at the Iron Workers Training Center on October 5 in La Palma.
(Eric Thayer/Los Angeles Times)
The tax measure was developed by the Service Employees International Union-United Healthcare Workers West in response to cuts to federal health care funding signed by President Trump last year, which are expected to reduce California’s health care budget by $100 billion, putting a burden on the state’s most vulnerable residents.
“Trump’s ‘Big Beautiful Bill’ is slashing health care funding, with significant cuts to health care coverage planned after the midterms,” said Suzanne Jimenez, the union’s chief of staff. “More than 3 million Californians could lose their health insurance. Hospitals and emergency rooms are at risk of closing. Patients will die needlessly when the care they need is no longer available. Proposition 40 is an emergency response to this looming catastrophe.”
Supporters of the proposal raised $34.3 million, almost all of it from Jimenez’s union.
The other two measures, Propositions 41 and 42, would repeal the billionaires tax if either gets more votes.
Proponents of Proposition 41 say the measure aims to reduce wasteful government spending by requiring audits for new special state taxes and would prohibit new state taxes that would exempt their revenue from a state spending cap. Proponents of Proposition 42 argue that it would prohibit new taxes on retirement assets, individual assets and other forms of personal savings.
Supporters of the billionaire tax say both measures are well-funded smokescreens to undermine Proposition 40.
Campaigns opposing the wealth tax as well as the two countermeasures have received huge donations from several of the state’s billionaires. But Building a Better California, the main funder of efforts to defeat the wealth tax, noted that its allies include Democratic and Republican politicians, prominent labor groups and business leaders.
“It’s rare for such a broad coalition to unite around a single cause in California, but it reflects the potentially devastating impact of this measure on our state’s health care, education and economy,” the group said in a statement.
Among the largest donors opposed to the wealth tax are billionaires Sergey Brin, a co-founder of Google who has donated more than $100 million to anti-wealth tax efforts, as well as former Google executive Eric Schmidt and venture capitalist L. John Doerr, who each donated $40 million.
Brin, Schmidt and Doerr did not respond to requests for comment.
American technology entrepreneur Sergey Brin and Gerelyn Gilbert-Soto arrive at the 2026 Met Gala celebrating “Costume Art” at the Metropolitan Museum of Art in New York in May.
(ANGELA WEISS/AFP via Getty Images)
The spending disparity also reflects a division between Democrats and their allies, many of whom support the wealth tax but believe the way Proposition 40 was written is disastrous for California’s volatile budget, which depends on the state’s wealthiest residents.
Jodi Hicks, executive director and president of Planned Parenthood Affiliates of California, said that while her organization would support a statewide or California wealth tax, their main concerns were the impacts of the 1940s on the state budget and health care in the state.
“We are opposed to this particular proposal because we believe it does more harm than good,” she said, adding that after what her organization “faced last year, having to scramble to find dollars because of (cuts in federal funding), we are committed to working with stakeholders facing cuts and not hurting the budget and finding revenue in a smart way.”
The monetary imbalance between supporters and opponents of the billionaires tax is vast. Opponents of the measure raised $316.7 million, while supporters raised nearly $34.3 million.
The Fair Games Coalition, comprised of community leaders, labor organizations and advocates, announces the launch of the Overpaid CEO Tax Initiative outside the Tesla Diner in West Hollywood in January.
(Genaro Molina/Los Angeles Times)
Wealth tax supporters spent almost all of their money collecting signatures to put the measure on the ballot. They had $1.6 million on hand as of October 17.
Today, as voters cast ballots, their campaign appears to depend on public events and media coverage, such as Sen. Bernie Sanders’ (I-Vt.) recent rally in support of Proposition 40 in downtown Los Angeles.
“What you’re showing people from coast to coast and around the world is that yes, we can take on the greed of the oligarchs,” he said, calling the ballot measure the nation’s most important. “Yes, we can create an economy and government that works for all of us, not just the 1%. »
Facebook creator and Meta chief Mark Zuckerberg was among the California billionaires Sanders cited in his remarks. After Zuckerberg told company executives he planned to leave the state to avoid having his control over the company significantly reduced by being forced to sell enough of his shares in the social media giant to pay the proposed levy, the company announced Wednesday the creation of a new type of non-voting stock that would allow Zuckerberg to sell enough shares to pay the proposed tax while retaining his voting rights in exchange for his agreement to stay in the state for eight years.
Meta CEO Mark Zuckerberg listens as President Trump speaks to reporters at the White House on September 29.
(Jacquelyn Martin / Ap Photo/jacquelyn Martin)
The wealth tax campaign emails and texts voters and has an online presence.
“Remember: it is not enough to vote YES on 40. You must also vote NO on 41 + 42,” reads an email sent to voters on Tuesday. “Make no mistake: Propositions 41 and 42 are billionaire-funded initiatives designed specifically to undermine Proposition 40, California’s billionaire tax.”
Meanwhile, anti-40 and pro-42 campaigns are flooding voters on television, on streaming services, in mailboxes, through online influencers and even in digital video games such as Sim City.
Jimenez said voters will see through the blizzard of campaign messages.
“Billionaires think voters are stupid. They think they can bury the facts under millions of dollars of advertising and disguise Proposition 42… as protecting ordinary taxpayers,” she said. “Their spending also works in our favor. When billionaires can afford to spend millions a day to protect their wealth, voters can see that billionaires have plenty of money to save.”
Sheri Sadler, a veteran Democratic media buyer, questioned how much voters were hearing about the rationale for the proposed billionaires tax.
“The yes camp is seriously lacking in the means to get its message across while the no camp is tapping into different types of pockets,” she said.
Jessica Levinson, an election law professor at Loyola Law School, said that beyond voter confusion over the competing ballot measures, she will certainly face legal challenges, including regarding the retroactive nature of the tax, which would apply to any billionaire living in California as of Jan. 1. She described this as “the biggest legal pressure point”.
“It’s a bit of a mess,” she said.
Times Staff Writer Gabrielle LaMarr LeMee contributed to this report.
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