Billionaires raise $300 million to defeat California asset tax before November 3

California tech executives and venture capitalists have donated more than $300 million to oppose a proposed one-time 5% asset tax on the state's billionaires. The funds support a heavy advertising and outreach campaign ahead of the November 3 ballot measure. This spending has made the initiative the most expensive ballot measure in state history.

The proposal, known as Proposition 40, was drafted with the help of Brian Galle, an economics professor at the University of California, Berkeley. Galle recently found a flyer in his mailbox that contained claims he did not write, including assertions that the tax could apply to anyone, even their retirement savings. He noted that the tax would actually require a two-thirds majority in the state assembly to change.

David McCuan, a political science professor at Sonoma State University, tracks state and local elections. He stated that the billionaire spending has created one of the most expensive campaigns of this midterm cycle. The opposition has far outstripped the fundraising of the tax's supporters, who raised only $32 million. This disparity has resulted in ubiquitous ads and door-to-door outreach to voters.

Mark Zuckerberg, founder of Meta, has not personally donated to the opposition. However, SEC filings show he told the company board that he would buy a home outside California to avoid the tax. The board, which includes Doordash founder Tony Xu and Stripe co-founder Patrick Collison, both major donors to the opposition, created a new class of shares that Zuckerberg could use to pay the tax if he remains in the state.

Supporters of the tax face internal challenges within the Democratic Party. The state party has endorsed the measure, but Governor Gavin Newsom and gubernatorial candidate Xavier Becerra have opposed it. Newsom, who is eyeing a 2028 presidential run, called the tax poorly written. He argued it could harm the state if billionaires, whose combined wealth is estimated at $2.3 trillion, choose to move away.

Opponents have also backed two other ballot measures. One would prohibit new state taxes based on personal property or imposed retroactively. The other requires state auditors to review the financial impact of proposed tax measures before voters see them. If these measures pass and receive more votes than the billionaire tax, they could effectively negate the asset tax even if it passes.

A recent poll by the Public Policy Institute of California shows voters support the tax by a small margin. They also support the two opposing measures. Mark Baldassare, the institute's survey director, noted that only about one-third of citizen initiatives pass. He said the burden is on the yes side, and support can decline if voters are unsure. Suzanne Jimenez, chief of staff at the SEIU health workers union, which sponsored the measure, said 3,000 volunteers have been knocking on doors in recent weeks to clarify the proposal.