California: Ultra-rich spending $1M per day to defeat billionaire tax
What's the story
Silicon Valley's tech billionaires are pouring massive amounts of money into a campaign against California's proposed wealth tax. The measure, known as Proposition 40, is set to be voted on in early November. If approved, it would impose a one-time 5% tax on the state's billionaires, with most of the revenue going toward healthcare programs and some toward education and food assistance.
Campaign strategy
A look at anti-Prop 40 campaign
The opposition campaign against Prop 40 has already raised over $340 million and is now spending over $1 million a day to defeat the measure, state financial disclosures show.
In the first 19 days of September alone, the anti-billionaire tax campaign spent at least $21.2 million on its efforts.
The funding has been used for a barrage of robotexts, mailers, and ads warning that a tax on billionaires could lead to higher taxes for all Californians.
Political divide
Divided Democratic stance
The proposed wealth tax has divided California Democrats, with some backing it enthusiastically while others dismissing it as a one-time levy that wouldn't fund all healthcare programs.
Major unions and progressive politicians such as Vermont Senator Bernie Sanders and California Congressman Ro Khanna support Prop 40.
However, both Democratic and Republican gubernatorial candidates, as well as organizations like Planned Parenthood Affiliates of California, oppose the measure.
Opposition leaders
Tech billionaires lead fight
The biggest opponents of Prop 40 are the tech billionaires it would affect the most.
Notable donors to the anti-Prop 40 campaign include Palantir co-founder Peter Thiel, former Google CEO Eric Schmidt, DoorDash CEO Tony Xu, Stripe CEO Patrick Collison, and crypto mogul Chris Larsen.
The largest contributor is Google co-founder Sergey Brin, who has donated at least $102 million against the tax.
National implications
Broader implications of Prop 40
Proponents and opponents of the billionaire tax see it as a potential precursor to wealth taxes in other states.
While opponents view it as a populist contagion, supporters link it to affordability, a key issue for the upcoming midterms.
With California being home to more billionaires than any other state, Prop 40 is viewed as paving the way for more referendums on wealth inequality across US.
Ballot hurdles
Countermeasures complicate Prop 40 vote
Adding to the complexity, two countermeasures have been placed on the November ballot by opponents of Prop 40: Proposition 41 and Proposition 42.
Prop 41 targets the billionaire tax directly while Prop 42 is a broader measure aimed at shielding people from certain new taxes.
If either receives more yes votes than Prop 40, it will block implementation of the billionaire tax, even if it passes.