California’s billionaires are going on the defensive, putting millions of dollars behind an effort to defeat a one-time billionaire tax that would collect 5% of their net worth if approved.
A pair of billionaires, along with other wealthy individuals, have recently upped their contributions to Building a Better California, a PAC formed earlier this year to oppose Proposition 40, which would impose a one-time 5% tax on California residents with more than $1 billion in assets to increase healthcare funding in the state.
Venture capitalist John Doerr put in $7.5 million to the group, while the executive chair of blockchain company Ripple, Chris Larsen, contributed an extra $10 million to the group, according to a campaign finance filing from August 14, the Financial Times reported. Doerr is worth about $22.6 billion according to Forbes, while Larsen is worth $11.4 billion.
Some multimillionaires also contributed, including the co-founder of cybersecurity company Lookout, John Hering, and Greenoaks Capital founder Neil Mehta, who contributed $946,000 and $250,000, respectively.
The newest contributions come as Building a Better California boasts an endowment of $110 million as of late June—a sign that wealthy Californians are taking seriously the threat the one-time tax represents for their finances if approved by voters in November.
Still, a recent poll by UC Berkeley’s Institute of Governmental Studies shows voters are split on whether to approve the billionaire tax. The survey of more than 4,000 registered voters found that 48% of likely voters support the measure, while 41% oppose it. Though registered Democrats overwhelmingly said they would back the proposed tax, only 50% of unaffiliated voters said the same, while 80% of Republicans said they would not support the proposal.
“These results suggest that the Billionaires Tax initiative is shaping up to be a closely fought contest, with the key question being whether opponents can make big enough inroads among the state’s traditionally Democratic-leaning voters,” said Eric Schickler, co-director of the Institute of Governmental Studies, in a press release.
Two fighting propositions
Building a Better California isn’t taking any chances. The group has backed two of its own initiatives, Proposition 41 and Proposition 42, which would cancel out the billionaire tax if either receives more votes than the billionaires tax, even if the billionaire tax is also approved.
Proposition 41 would require the state auditor to review any special tax proposal before it is presented to voters, while Proposition 42 would ban new taxes based on mere ownership of assets like property, which are usually only taxed when sold.
It’s unclear if either Proposition 41 or 42 has more of a chance at passing than the billionaire tax. The survey by the Institute of Governmental Studies found that while 72% of voters had heard of the billionaire tax, fewer than a third of the state’s voters were aware the two counter-intitiatives existed.
Building a Better California has also allocated a large chunk of its massive war chest to reserve $87 million worth of advertising time ahead of the November election to sway public opinion, the New York Times reported last month.
While some important state politicians, including Gov. Gavin Newsom and the democratic candidate for governor, Xavier Becerra, have come out against the billionaire tax, earlier this month, the California Democratic Party endorsed the proposal, dealing a blow to billionaire opponents of the bill.
Among the billionaires who oppose the bill, Google cofounder Sergey Brin is among the most adamant. The world’s fourth richest man moved many of his assets out of California late last year and has already put $102 million toward opposing the California wealth tax after an additional $20 million contribution he made to Building a Better California earlier this month.
Other billionaires, including former Shark Tank star Mark Cuban have also come out against the billionaire tax. In an exchange on X over the weekend, Cuban warned California congressman Ro Khanna (D-Calif.) that the tax would hurt entrepreneurs and innovation in the state.
“IMO, if this passes, only idiot startup founders stay in Cali,” Cuban wrote in a post.
Still, prominent politicians like Sen. Bernie Sanders of Vermont have pushed for the billionaire tax to pass. Sanders said in February that the billionaire tax would help show the wealthiest Americans “we are still living in a democratic society where the people have some power.”
Sen. Sanders with Rep. Khanna also introduced legislation in March that would take a version of California’s billionaire tax to the national level.
Their bill, the “Make Billionaires Pay Their Fair Share Act,” would establish a 5% wealth tax on America’s 938 billionaires to expand Medicare, reverse cuts to Medicaid made by President Trump’s Big Beautiful Bill, and provide a $3,000 direct payment to every man, woman, and child in households making $150,000 or less.
