A high-stakes political contest over a proposed wealth tax on the California ballot has triggered a massive influx of more than $351 million in political donations, marking it as one of the most expensive campaign fights in the state’s history. The battle centers on Proposition 40, an initiative that would levy a one-time, 5% tax on the assets of billionaires who resided in California as of January 1 of this year.
The vast majority of the funding—approximately 90%—is being directed toward defeating the measure. This multifaceted opposition effort is bankrolled primarily by some of the state’s wealthiest residents, who are the direct targets of what supporters call an economic reckoning. Opponents have raised $316.7 million to fight the tax, while proponents, led primarily by the Service Employees International Union-United Healthcare Workers West (SEIU-UHW West), have raised roughly $34.3 million.
The campaign has evolved into a complex legal and strategic tug-of-war involving three intertwined ballot initiatives. While Proposition 40 seeks to establish the tax, two other measures, Propositions 41 and 42, were designed specifically to nullify it. Proposition 41 would require audits for new state special taxes and bar any that exempt revenue from state spending limits. Proposition 42 would prohibit new taxes on retirement holdings and personal savings. If either of these countermeasures receives more votes than Proposition 40, the billionaire tax would be effectively canceled.
Political strategists noted the unprecedented scale of the opposition’s reach. Because the anti-tax campaign is so well-funded, its messaging has appeared across network television, streaming services, and even within digital video games like Sim City. However, analysts also point to the 2022 gambling measures—where a record $463 million was spent only for both sides to lose—as evidence that massive spending does not always guarantee a victory.
The billionaire tax was crafted by SEIU-UHW West as a direct response to federal healthcare funding cuts. Union officials estimate those cuts could reduce California’s healthcare budget by $100 billion, potentially leaving 3 million residents without insurance and forcing the closure of emergency rooms. Suzanne Jimenez, the union’s chief of staff, described the measure as an emergency response to a looming disaster, arguing that billionaires have plenty of money to spare if they can afford to spend millions daily on campaign advertising.
Opposition to the tax has drawn significant contributions from tech industry leaders. Google co-founder Sergey Brin has donated more than $100 million to anti-wealth-tax efforts, while former Google executive Eric Schmidt and venture capitalist L. John Doerr each contributed $40 million. The opposition coalition, Building a Better California, also includes a broad range of Democratic and Republican politicians, business leaders, and some labor groups who argue the measure could harm the state’s economy.
Even those who support the concept of a wealth tax have expressed concerns over the specific wording of Proposition 40. Jodi Hicks, president of Planned Parenthood Affiliates of California, stated her organization opposes this particular proposal because of its potential impact on the state’s volatile budget, which is heavily reliant on its wealthiest residents.
The measure has gained national attention, drawing a recent rally in Los Angeles from Sen. Bernie Sanders, who called it the most important ballot measure in the country. During his remarks, Sanders specifically named Meta CEO Mark Zuckerberg as an example of the “greed of the oligarchs.” In a preemptive move to address the potential tax, Meta recently announced a new class of non-voting stock. This change allows Zuckerberg to sell enough shares to pay the proposed levy without losing control of his company, provided he agrees to remain in California for eight years.
As the election nears, the pro-tax campaign is operating on a lean budget, with only $1.6 million on hand as of October 17 after spending most of its funds on the signature-gathering phase. Legal experts, including Loyola Law School professor Jessica Levinson, anticipate that even if Proposition 40 passes, it will face immediate legal challenges regarding its retroactive nature, which applies to assets held as of the start of the year.
