California Prop 40 Vote Hinges on One-Time Tax for Billionaires

Californians voting on November 3 will determine whether individuals with assets of $1 billion or more face a one-time 5 percent tax. The measure, known as Prop 40, targets wealth estimated by its authors at $2.3 trillion held by the state's billionaires.

Opposition funding has reached more than $300 million, a sum contributed by figures including Google co-founder Sergey Brin, DoorDash founder Tony Xu, Stripe co-founder Patrick Collison, Ripple co-executive chairman Chris Larsen, and venture capitalists John Doerr, Michael Moritz, and Vinod Khosla. Supporters of the measure have raised $32 million.

David McCuan, a political science professor at Sonoma State University who tracks state and local elections, called this the most expensive ballot measure fight ever. Francesco Trebbi of UC Berkeley's Haas School of Business characterized the contest as "Sergey Brin v millions of Californians" and said the spending dynamic erodes trust in the system.

Brian Galle, a UC Berkeley economics professor who helped write the proposal, received a flyer claiming the tax could apply to retirement savings and other assets held by any resident. Galle stated those claims were not in his drafting work. Ashley Craig, a volunteer with the Patriotic Millionaires, said voters frequently ask her about rumors that the measure contains secret provisions to tax the general public.

The measure requires any future legislative amendment to secure a two-thirds majority in the assembly while preserving the proposal's intent. Gavin Newsom, who is considering a 2028 presidential run, opposes the measure, calling it "poorly written" and warning that a wealth tax could prompt billionaires to leave the state. Xavier Becerra and Katie Porter also oppose Prop 40.

Opponents have placed two additional measures on the ballot alongside Prop 40. One would prohibit new state taxes on personal property or retroactive tax increases, and the other would require state auditors to review the financial impact of tax measures before they reach voters. If either measure receives more votes than Prop 40, it would nullify the billionaire tax even if voters approve it.

A recent Public Policy Institute of California poll found voters narrowly favor the tax while also backing the two measures designed to stop it. Mark Baldassare, the institute's statewide survey director, noted that only about a third of citizen initiatives pass, placing the burden on the yes side. He plans to poll again once voters receive state guides explaining the measures.

Suzane Jiminez, chief of staff at the SEIU health workers union sponsoring the measure, said 3,000 volunteers have recently been knocking on doors and distributing flyers. Senator Bernie Sanders and Congressman Ro Khanna have also held events across the state to rally support.