Ballot Spending: $300 Million War Against California Tax

More than $300 million has been donated to stop a single ballot measure in California. The figure marks the most expensive fight over a state ballot item in history, according to David McCuan, a political science professor at Sonoma State University who tracks these elections. The money is aimed at blocking Proposition 40, a one-time 5 percent tax on the assets of the state's billionaires. Voters will cast ballots on November 3.

The opposition group includes prominent tech leaders and venture capitalists. Sergey Brin, co-founder of Google, led the donations along with DoorDash founder Tony Xu and Stripe co-founder Patrick Collison. Other contributors include Ripple co-executive chairman Chris Larsen, John Doerr, Michael Moritz, and Vinod Khosla. Supporters of the tax have raised only $32 million. This creates a spending gap that defines the campaign.

Mark Zuckerberg, founder of Meta, has not donated to the opposition. However, his company’s SEC filings reveal a strategy to avoid the tax. Zuckerberg told the board of directors, which includes Xu and Collison, that he planned to buy a home outside California. The board then created a new class of shares for him to use in payment. This move was designed to prevent his relocation from affecting Meta’s stock price.

The volume of advertising has confused some voters. Brian Galle, an economics professor at the University of California at Berkeley who helped write the proposal, received a flyer claiming the tax would apply to anyone, including retirement savings. He stated that those claims were not in the original text. Ashley Craig, a volunteer with the pro-tax group Patriotic Millionaires, said she frequently hears from voters that the measure contains secret provisions. She noted that changing the tax would require a two-thirds majority in the assembly.

Galle argues the spending highlights the issue the tax addresses. He said, "The irony is that Prop 40 is meant to make democracy more equal, but the billionaires are using their money to avoid that." He cited the Supreme Court's Citizens United v FEC ruling in his explanation. Francesco Trebbi, a professor at Berkeley's Haas School of Business, described the contest as "Sergey Brin v millions of Californians." He said the situation erodes trust in the system.

The fight also shows a split within the Democratic Party. The state party has endorsed the tax, but Craig said she has received little ground support from the organization. McCuan called the measure a proxy test between progressives and moderates. He suggested that a win could encourage progressive candidates to try similar ideas in the 2028 presidential race. Governor Gavin Newsom, who is eyeing a 2028 run, opposes the tax. He called it "poorly written" and warned it would harm the state if billionaires leave. Gubernatorial candidate Xavier Becerra and former congresswoman Katie Porter also oppose it.

Opponents have backed two other 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 passes with more votes than the billionaire tax, it could negate the tax even if voters approve it. A recent Public Policy Institute of California poll found voters narrowly support the tax. They also back the two measures aimed at stopping it. Mark Baldassare, the institute's statewide survey director, noted that only about a third of citizen initiatives pass. He plans to poll again as voters receive state guides explaining the measures.

Suzane Jiminez, chief of staff at the SEIU health workers union, which sponsored the measure, said she feels confident. She reported that 3,000 volunteers have recently been 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 backers. They could blame moderates and target big tech as a political bogeyman.