Silicon Valley Money Pours Into the Fight Over California's Billionaire Tax as Polls Tighten

With less than four weeks until the Nov. 3 election, the most expensive fight on California's ballot is over a tax that only a couple hundred people would ever pay. Proposition 40 would impose a one-time 5% tax on the net worth of Californians worth more than $1 billion, and much of the money trying to stop it comes from the Bay Area's tech elite.

What the measure would do

According to the state's nonpartisan Legislative Analyst's Office, the tax would apply to billionaires who were California residents on Jan. 1, 2026, and would come due in 2027. Taxpayers could spread payments over five years, at a higher total cost. Real estate, pensions and retirement accounts would generally be left out. CalMatters reports that roughly 200 people would owe it, with 90% of the revenue going to health care for low-income Californians and the rest to education and food assistance. The measure is sponsored by the union SEIU-United Healthcare Workers West.

How much it would raise is disputed. Backers, including UC Berkeley economist Emmanuel Saez, a co-author of the measure, project about $100 billion, while skeptics cited by Reuters put it closer to $40 billion, Latin Times reported. The analyst's office says only that it would bring in tens of billions of dollars over several years, offset by a possible drop of less than $1 billion a year in income taxes if some billionaires leave the state.

The Bay Area connection

The opposition is heavily funded from Silicon Valley. CalMatters lists Google co-founder Sergey Brin and Ripple co-founder Chris Larsen among opponents, along with Gov. Gavin Newsom. Brin and venture capitalists John Doerr and Michael Moritz are the main funders of Building a Better California, the committee behind two rival measures on the same ballot. Citing the Sacramento Bee's review of filings, Latin Times reported that opponents have spent more than $195 million, including $102 million from Brin, against about $36 million from supporters.

Those rival measures matter. Proposition 41 would require state audits of programs paid for by new special taxes and count that revenue against the state spending limit. Proposition 42 would ban new state taxes on owning personal property, such as investment accounts and business stakes, and most retroactive taxes. If either gets more yes votes than Proposition 40, the analyst's office warns, courts could block the billionaire tax even if it passes with a majority.

Where the polls stand

Surveys show a close race. A UC Berkeley Institute of Governmental Studies poll taken Sept. 15 to 20 found 45% of likely voters in favor, 42% opposed and 13% undecided, down from a 48% to 41% edge in August, the Los Angeles Times reported. An NBCUniversal Local and Telemundo poll conducted Sept. 21 to 24 found 48% yes and 38% no. Neither shows the measure above 50%.

Ballots are already in the mail across the Bay Area, so many voters can decide now.