asset

The billionaires targeted by the wealth tax on the November ballot include owners of some of California’s top sports teams and, among them, there will be winners and losers if voters approve the measure.

Which owners would be ensnared by the proposed tax on billionaires’ assets remains unclear, since it’s largely dependent on whether they are declared official California residents, at least for state tax purposes. And that’s before lawyers and accountants get involved, an almost certain bet if the ballot measure is approved by California voters.

So it’s possible that the majority owner of the Los Angeles Chargers, Dean Spanos, would have to pay the the wealth tax while the owner of the Los Angeles Rams, San Kroenke, would not — even though both their teams are playing on the same home field at SoFi Stadium in Inglewood. It all depends on whether the state considers Spanos or Kroenke official California residents and how their assets are tallied.

Other wealthy team owners or co-owners who have residences in California and could be subject to the tax include the Golden State Warriors’ Joe Lacob and Peter Guber, the San Diego Padres’ José E. Feliciano and Kwanza Jones, the San Jose Sharks’ Hasso Plattner and the Anaheim Ducks’ Henry Samueli.

Among those who appear to live out of state, according to news reports, and may not be impacted: the San Francisco 49ers’ Denise DeBartolo York and John York, the Los Angeles Clippers’ Steve Ballmer, the San Francisco Giants’ Charles Johnson, the L.A. Kings’ and the L.A. Galaxy’s Philip Anschutz.

In August, embattled billionaire Mark Walter agreed to sell the L.A. Lakers to former Disney chief executive Bob Iger and venture capitalist Joshua Kushner. The proposed billionaire tax would apply to Iger, who lives in California, but not Kushner, who lives in New York. A spokesperson for Iger declined comment. Walter, who also owns the Dodgers and has been under federal investigation, told the California Post on Wednesday that he has no plans to sell the team.

There is uncertainty and disagreement about how the tax would be levied on sports team owners, and how their ownership stakes would be evaluated by the state when assessing their assets.

Representatives of the Warriors and Chargers, declined comment. Spokespeople for the Kings, Padres, Sharks and Ducks did not respond to requests for comment, nor did representatives of Kroenke or Sun Microsystems co-founder Vinod Khosla, who lives in California and whose $9.6-billion purchase of the Seattle Seahawks was finalized in September.

Legendary sports agent Leigh Steinberg warned that the proposed tax would have unintended consequences. “It creates an uneven playing field,” he said. “Out-of-state owners get an advantage over in-state residents.”

Steinberg, who has represented more than 300 professional athletes including Troy Aikman, Drew Bledsoe, Michael Vick and Oscar De La Hoya, said the increased tax could be passed on to fans if voters approve Proposition 40 on Nov. 3.

“Ticket prices are high enough anyway, and somewhat prohibitive to a working person or young person attending a game live,” Steinberg said. “The last thing in the world positive for the growth of sports is passing on that surcharge.”

Dodgers fans buy food at Dodgers Stadium.

(Gina Ferazzi/Los Angeles Times)

Proposition 40 would impose a one-time 5% levy on many of the assets of billionaires, including their holdings in companies. It was crafted by a healthcare union to compensate for federal healthcare cuts signed by President Trump last year that will cost California an estimated $100 billion, impacting the state’s most vulnerable residents.

David Gamage, a tax law and policy professor at the University of Missouri’s law school, countered that consumers would be far more hurt by the impacts of the impending federal healthcare funding cuts than by potentially higher prices at sporting events.

“The billionaire wealth tax would address the healthcare crisis caused by the Trump administration slashing Medicaid and other healthcare funding. Passing the billionaire wealth tax would be expected to reduce healthcare costs and thereby keep the prices of hot dogs and other consumer goods lower,” Gamage said. “Trying to fool voters by implying otherwise is shameful.”

More than 200 billionaires live in California, some of whom moved themselves or their businesses out of the state because of the proposed tax. Facebook creator Mark Zuckerberg, the chief executive of social media giant Meta, told company leaders that he planned to leave the state to avoid his control over the company being substantially diluted by being forced to sell enough stock to pay the proposed levy. Last week, the company announced the creation of a new nonvoting type of stock that would allow Zuckerberg to sell enough shares to pay the proposed tax while retaining his voting power in exchange for him agreeing to remain in the state for eight years.

Protesters in New York demonstrate against Elon Musk following the launch of the SpaceX initial public offering.

(Spencer Platt / Getty Images)

Proposition 40 supporters say that billionaire sports team owners have benefited from Trump’s tax cuts — dividends they didn’t share with the fans who spend hard-earned money to bring their families to games — and that they need to pay their fair share.

Opponents argue that professional sports are among myriad California economic engines that will suffer if voters approve the proposition, in part because owners based in the state would be subject to the tax while those who reside in other parts of the country would be exempt.

The measure “will also drive up the cost of operating a sports team in California, increasing the price of tickets, concessions and merchandise,” said Rob Lapsley, president of the California Business Roundtable. “This is just one of many ways Proposition 40 will cost Californians.”

A poll by UC Berkeley’s Institute of Governmental Studies released Thursdayshowed public sentiment had turned against the billionaire tax, with half of likely voters opposing it and 42% supporting it.

Clippers owner Steve Ballmer addresses the crowd.

(Lindsey Wasson / Associated Press)

More than $404 million has been donated to efforts supporting and opposing the wealth tax, according to the California Secretary of State’s Office. Proponents of the ballot measure had raised $36.5 million as of Thursday, while opponents received nearly $368 million.

The residency of billionaires is often difficult to ascertain, given that many have multiple properties across the nation and around the world. It is not solely based on where the person is registered to vote.

Among the “facts and circumstances” the California Franchise Tax Board considers are the person’s employer, their spouse’s and childrens’ locations, where mail is delivered, and the location of doctors, accountants, lawyers, country club memberships and houses of worship. The number of days spent in California also is factored into the board’s assessment of residency.

Lakers part-owner Patrick Soon-Shiong at a game.

(Gina Ferazzi/Los Angeles Times)

Los Angeles Times owner Dr. Patrick Soon-Shiong, a billionaire, owns 4% of the Lakers and recently became a co-owner of a new women’s professional volleyball team in Los Angeles expected to start competing next year.

Soon-Shiong noted that it’s not only wealthy Californians who oppose the tax. Teachers, firefighters and other groups oppose Proposition 40 because of concerns about long-term impacts on the state. And, as a businessman with stakes in sports teams, he predicted bad effects on pro sports.

“It’s really, really expensive to bring a family to watch a professional game, whatever that game may be,” he said during an interview in September. “All those costs will go up, and for sure, it’ll be passed down to the cost of the ticket.”

Times Library Director Cary Schneider contributed to this report.

The so-called billionaire tax has become one of the most contested California propositions in years, generating national interest and massive spending by opponents. It also has spawned two rival ballot measures.

Here’s a cheat sheet for sorting it all out.

Proposition 40

The basics

Proposition 40 would impose a one-time 5% tax on California billionaires’ assets. The tax applies to people with a net worth of at least $1 billion who resided in California on Jan. 1.

Impact

Ninety percent of the tax would fund healthcare, and 10% would go toward education and food assistance.

The tax would affect hundreds of billionaires whose net worth includes assets such as their businesses, stocks and other investments. Real property, pensions and retirement accounts generally would be excluded.

Proposition 41

It’s called the Improving Transparency, Effectiveness and Efficiency in California Government Act. But it is deeply connected to Proposition 40 and is funded by foes of the billionaire tax.

The basics

Proposition 41 requires the state auditor to review programs funded by proposed special taxes before they appear on the ballot. More importantly, it also prohibits new state taxes from being exempted from a voter-approved state spending limit.

Impact

The Legislative Analyst’s Office says passage of Proposition 41 could prevent Proposition 40, the proposed billionaire tax, from becoming law even if voters approve it. This could happen if Proposition 41 receives more “yes” votes than Proposition 40.

Proposition 42

Proposition 42 would limit the state’s ability to impose certain new taxes. But it’s more complicated and far-reaching than that description might sound. And, yes, it’s also backed by opponents of Proposition 40.

The basics

Proposition 42 would prohibit new taxes on “retirement holdings, individually owned assets, and other forms of personal savings” that take effect after Jan. 1, 2026. It also would bar retroactive taxes on past earnings unless the state is using revenue from the tax to respond to emergencies such as a fire or a flood.

Impact

The Legislative Analyst’s Office says Proposition 42 could nullify Proposition 40 because the two measures conflict with each other. If voters approve both, the one with the most “yes” votes generally would become law, the office says.

Dig deeper

The billionaire tax was pushed by the Service Employees International Union-United Healthcare Workers West and has some labor and progressive support, including from Sen. Bernie Sanders (I-Vt.) and the state Democratic Party. They say the tax is needed to help the less fortunate and that the super-rich can afford it. But key Democrats and some key unions are not supporting it.

Critics include some of California’s richest people, and they are spending a fortune to defeat it. They say it will hurt innovation and drive the wealthy out of the state, hurting the treasury.

More reading

A powerful union and the birth of the billionaire tax (L.A. Times)

Why unions are divided over Prop. 40 (L.A. Times)

The Google co-founder fighting the billionaire tax (L.A. Times)

Inside the massive spending to defeat Prop. 40 (L.A. Times)

How the billionaire tax could spark national movement (The New Yorker)

The academics behind Prop. 40 (Sacramento Bee)

Will Prop. 40 reallly bring an exodus? (L.A. Times)

Why healthcare is divided by Prop. 40 (Bloomberg)

Taxing the “ultrarich,” a guide (New York Times)

California voters are souring on a Nov. 3 ballot measure to impose a one-time tax on billionaires to help fund healthcare programs, a proposal that has triggered one of the most expensive political battles in state history.

Half of likely voters plan to vote against Proposition 40, the proposed wealth tax on billionaires’ assets, while 42% support it, according to a new poll by UC Berkeley’s Institute of Governmental Studies that was co-sponsored by the Los Angeles Times. The findings mark a significant decline in support of the measure, which was crafted by an influential California healthcare union to compensate for an estimated $100 billion in federal healthcare cuts approved by President Trump and congressional Republicans.

The survey also found that a solid majority of likely voters opposed Proposition 39, which would require Californians to provide identification when voting and election officials to verify registered voters are U.S. citizens. The findings come as the Trump administration continues to attack California as a haven for voter fraud, including unfounded allegations of rampant illegal voting by undocumented immigrants.

Mark DiCamillo, the poll’s director, said previous surveys showed support for Proposition 40 has been fragile, and the most recent shows its prospects have dimmed as election day approaches.

The increase in opposition to Proposition 40 is “broad-based and spans virtually all major segments of the electorate,” DiCamillio said. The ballot measure was leading in a Berkeley poll conducted just six weeks ago, albeit by a slim margin, so its reversal of fortune is significant, he said.

The declining support comes after an onslaught of money spent opposing Proposition 40, including a torrent of television and social media ads airing everywhere from NFL games to “Everybody Loves Raymond” reruns. Nearly $368 million has been contributed to efforts opposing the billionaire tax, while $36 million has been donated to support the proposed levy.

Proposition 40 would impose a one-time 5% tax on the assets of billionaires who resided in California as of Jan. 1, with some exceptions. Democrats and their allies are splintered over the proposal. Some, including Gov. Gavin Newsom, argue it will prompt the wealthy to flee California, further harming its volatile budget, which is dependent on the state’s richest residents. The California Democratic Party and leading progressives support the measure, with Sen. Bernie Sanders (I-Vt.) calling it a modest tax necessary to help Californians struggling because of cuts imposed by Republicans to pay for tax breaks for the wealthy.

While Republican voters overwhelmingly oppose Proposition 40, nearly two-thirds of Democrats support it and more than a quarter opposing it. There is also a generational divide, with 6 out of 10 voters 65 years old or older opposing the measure, while more than two-thirds of those under 30 supporting it, according to the poll.

The findings are similar to a Public Policy Institute of California poll released Tuesday, which found 52% of likely voters would vote against Proposition 40, while 46% supported it.

The campaign against the wealth tax, funded by some of California’s richest tech moguls, is centered on three intertwined ballot initiatives: Proposition 40 and Propositions 41 and 42, both of which would undercut Proposition 40 through a series of changes to state tax laws and spending restrictions.

Proposition 41 would cut wasteful government spending by requiring audits of new state special taxes and would bar new state taxes that are exempt from a state spending limit. Proposition 42 would prohibit new taxes on retirement holdings, individually owned assets and other personal savings. Both Propositions 41 and 42 would nullify the billionaire tax if it passes, provided either measure receives more votes.

A plurality of voters oppose Propositions 41 and 42, a reversal from just six week ago, according to the poll.

In mid-September, voters were closely divided about Proposition 41 — 37% in favor and 33% opposed — with a large number of undecided. In the current poll, 38% of likely voters favor the measure and 47% oppose it. Proposition 42 led by 9 percentage points in the Berkeley/L.A. Times poll in September — 43% in favor and 34% opposed. Now, 43% of likely voters support it and 45% oppose it.

DiCamillo said backers of a ballot measure also should be concerned any time support registers below 50%, since voters who are undecided or unsure tend to vote no.

“It’s below 50%, and it’s trending down. Both of those are ominous signs,” DiCamillo said. Proposition 42 is “still very close. I’m not saying it’s definitely going down, but it’s moving in the wrong direction late in the campaign, and usually movement in a late poll is even more significant than the actual numbers themselves,”

He added that while many voters were unaware the two proposed ballot measures were designed as poison pills to kill the billionaire tax, among those who knew, the opposition was significantly greater.

If all three measures fail, that still would be a victory for the billionaires who spent aggressively to tank the wealth tax.

Another notable finding was voters’ support of Proposition 3, which would make permanent a higher income tax rate on the wealthy that funds education. A majority of voters — 54% — support continuing the levy, while 37% oppose it, according to the poll. DiCamillo says the disparity in support of the proposed billionaire tax and the extension of the existing wealth tax has been consistent in IGS’s polls, and is likely because of the differing foundations of the levies.

“Proposition 3 is already in place, and if you read the fiscal impact, if this were to pass, it maintains $5 billion to $15 billion of annual funding,” he said, “It’s a big revenue generator, and I think that is something that’s already in place.”

“Voters kind of understand the progressive nature of California’s tax system, and they kind of support that, but they don’t support nearly as much the idea of some new kind of tax, the wealth tax, which is taxing assets rather than income,” he said. “So that’s the distinction.”

These ballot measures are among 14 that voters will decide on Nov. 3, as well as statewide, congressional, local and judicial elections.

Among the other controversial measures is Proposition 39, a measure pushed by Republicans that would require all voters in future elections to show government-issued identification every time they vote in person or provide a special PIN or the last four digits of their Social Security number when submitting mail-in ballots.

The measure also would require the California secretary of state and county election officials to verify that registered voters are U.S. citizens by “using government data,” which according to supporters could include information in the federal Social Security Administration database, jury summons information and other government records.

Nearly 6 in 10 likely voters oppose the effort, while more than a third support it, split largely along party lines. More than half of voters who are registered as “no party preference” or with a smaller political party oppose the proposal, which DiCamillo said was an indication of trouble for the proposition given the state’s Democratic majority electorate and the proximity of the election.

“It’s hard for Republicans to push something over the finish line by themselves,” he said.

Other prominent ballot measures:

• Proposition 43, which would prohibit local governments from imposing certain new special taxes unless two-thirds of voters approve the proposal. Such proposals need a simple majority vote to be approved. While 46% of likely voters oppose the proposal, 36% support it, challenging numbers this close to election day, DiCamillo said. “It needs to get to 50,” he said. “We’ll see how you do that this late in the campaign.”

• Proposition 4, which would repeal a prohibition of public financing of campaigns, allowing state and local governments to support candidates if they abide by several rules. Likely voters are evenly split about the proposal, with 41% supporting it and opposing it, and 18% undecided. “It’s close, but it’s still below 50%. Most voters tend to vote no in the late going if they’re not convinced,” DiCamillo said, adding that he viewed the lack of support among voters who do not affiliate with a political party as a signal of potential failure.

The poll of 2,787 registered California voters was conducted online in English and Spanish Oct. 19-25 and has a margin of error of about 3 percentage points in either direction.

Nearly 40 years have passed since a Californian was president.

Several have pursued the White House in the decades since Ronald Reagan ambled into retirement, in January 1989. But not a one succeeded. Kamala Harris, who was saved from political purgatory when Joe Biden chose her as his running mate, came closest — though not close — in 2024.

The 2028 race could bring at least three more California contestants, none of whom seem likely to end the state’s presidential dry spell.

Some of that speaks to the individual flaws and political frailties of those who are, at the least, eyeing a 2028 bid: Harris, outgoing Gov. Gavin Newsom and five-term Silicon Valley Rep. Ro Khanna.

The problem they all face is their return address.

“There was a cliche that dates to the ‘60s or ‘70s, or maybe before that,” said Matthew Dallek, who was born and raised in Los Angeles and now teaches political management at George Washington University. “‘As California goes, so goes the nation.’ I don’t think that world exists anymore.”

Or as Jim Newton, a former L.A. Times reporter and editor and now a biographer and California historian, bluntly put it, the state has migrated in the minds of many beyond its golden confines “from a kind of serious west of the West place to a kind of hippy-dippy silly place.”

Not necessarily an accurate assessment on the part of those naysayers, but a damning perception nonetheless.

Political bookends

In many ways, Reagan and Harris serve as ideal exemplars of their home state and how it’s changed — along with attitudes toward California — in the decades between Reagan’s 1980 election as president and what would be, in 2028, Harris’ third try.

(The former vice president hasn’t ruled in or out another White House bid. Newsom has said he won’t run if Harris does. Khanna is in limbo until after November’s midterm election.)

Reagan was a product of the nation’s heartland and a California transplant. The state that launched him to the White House was predominantly white and Republican, an arsenal of the Cold War and the birthplace of a grass-roots anti-tax movement that swept the nation. His conservatism was seen by many as an antidote to the excesses of the 1960s and 1970s.

“California was in some ways on the cutting edge of American politics because it was signaling the direction in which our national politics were trending,” said Dallek, who wrote a book about Reagan’s first electoral victory, in the 1966 gubernatorial race. “Reagan was kind of the tip of the spear.”

Although leaning to the right, especially in presidential races, California was a robust two-party state until the mid-1990s, with several Democrats holding statewide office and long periods when Democrats controlled one or both houses of the Legislature. That competitiveness, along with California’s sizable cache of electoral votes, helped boost Reagan’s political standing nationally.

Harris was born in Oakland, the daughter of a father from Jamaica and a mother from India. By the time the Democrat left for Washington in 2017, to serve as a U.S. senator, then vice president, California had turned as blue as a cloudless desert sky.

California had more brown than white residents. The military was no longer the all-mighty economic engine it had been. And with Democrats in hegemonic control of Sacramento, the state had become the country’s preeminent bastion of liberal values and policies.

Many see that progressivism as overly obsessed with identity politics, personal pronouns and the like, ignoring practicalities and the day-to-day concerns of most voters.

California “has sort of gone off the deep end,” said Ken Khachigian, a longtime conservative strategist in Orange County, who worked for both Reagan and Richard M. Nixon.

(Between the two, California had a seat in the White House for more than half a roughly 40-year stretch. Nixon served two terms as vice president before winning the presidency in 1968. His second term was cut short when the Watergate scandal drove him from office.)

Khachigian noted that Republicans rule over states that are just as politically lopsided as California: Indiana, Mississippi, Idaho and Utah, for instance. “But they don’t seem crazed like California,” he said.

That’s obviously one partisan’s perspective.

‘Far left … ungovernable’

But Dallek agreed it’s no longer a political asset to come from California, which much of the country sees as “pretty far to the left.”

“And somewhat ungovernable at this point,” he added. “You have incredible, insane amounts of wealth concentrated in places like Silicon Valley and parts of Los Angeles and then you have incredible amounts of poverty and homelessness…. There’s not a sense that what’s happening in California really resonates across the country.”

There is a case to be made that California is great and good in so many ways, beyond just its incredible natural splendor.

It has the world’s fourth-largest economy, as Newsom and others never tire of pointing out. It remains on the cutting edge of culture, research and technology. It’s still a place that offers fertile ground for the imagination, for reinvention and for second chances.

Newcomers, from other states and abroad, are welcomed like in few other places. The unofficial California credo — live and let live — makes it possible to be one’s authentic self without fear of shame, ostracism or constraint.

Harris, Newsom, Khanna or any Democrat hailing from California will doubtless argue those virtues are what makes the state truly shine, convinced it’s a model they can sell the rest of America.

Good luck with that.

What else you should be reading

Get smart: Is there a doctor in the House? Backlash to Trump, RFK Jr. may boost their political ranks
The deep dive: Republican Steve Hilton leans on cheeky ads, voter discontent in long-shot campaign for governor
The L.A. Times Special:Take a breath. Educate yourself. Then vote.

Until next time,
mzb
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