wealth tax

More than $351 million in political donations has been poured into a high-stakes contest about a proposed wealth tax on the November ballot, making it one of the most costly campaigns in California history.

About 90% of the money is being spent to defeat a statewide initiative to impose a new tax on the assets of billionaires, a multifaceted opposition effort bankrolled primarily by ultra-rich Californians being targeted by a measure that supporters call an economic reckoning.

The billionaire tax, Proposition 40, would levy a one-time, 5% tax on many assets of California billionaires who lived in the state as of Jan. 1.

Millions of dollars continue to flow into the campaigns of three intertwined ballot initiatives at the center of the debate: Proposition 40, and Propositions 41 and Proposition 42, which would neuter the Proposition 40 through strategic, esoteric tax law changes.

“The pro-40 campaign picked a fight and then came to that fight with a butter knife against a nuclear arsenal,” said GOP strategist Rob Stutzman, who is not involved in any of the wealth-tax-related ballot measures. “Because they’re so well funded, in today’s multifaceted media world, they are able to show up everywhere from network TV to inside video games. That is a very, very large advantage few campaigns ever get to have.”

But, Stutzman warned, money does not guarantee a win.

In the most expensive ballot measure fights in California history, $463 million was spent on two gambling proposals 2022. The initiatives pitted some of California’s most successful Native American tribes with gaming interests against gambling corporations, including online sports gaming companies DraftKings and FanDuel. Both side’s measure failed.

People attend a rally against Proposition 40 at the Iron Workers Apprenticeship Training Center on Oct. 5 in La Palma.

(Eric Thayer/Los Angeles Times)

The tax measure was crafted by Service Employees International Union-United Healthcare Workers West in response to federal healthcare funding cuts signed by President Trump last year that are expected to reduce California’s healthcare budget by $100 billion, burdening the state’s most vulnerable residents.

“Trump’s ‘Big Beautiful Bill’ slashes healthcare funding, with major coverage cuts scheduled to hit after the midterms,” said Suzanne Jimenez, the union’s chief of staff. “More than 3 million Californians could lose their health insurance. Hospitals and emergency rooms face closure. Patients will die unnecessarily when the care they need is no longer there. Proposition 40 is an emergency response to that looming disaster.”

The proposition’s supporters raised $34.3 million, nearly all of it from Jimenez’s union.

The two other measures, Propositions 41 and 42, would nullify the billionaire tax if either receives more votes.

Proposition 41 supporters say the measure aims to cut wasteful government spending by requiring audits for new state special taxes and would bar new state taxes that exempt their revenue from a state spending limit. Backers of Proposition 42 argue it would prohibit new taxes on retirement holdings, individually owned assets and other forms of personal savings.

Advocates for the billionaire tax say both are well-financed smokescreens to undercut Proposition 40.

Opposition campaigns to the wealth tax as well as the two countermeasures have received enormous donations from several of the state’s billionaires. But Building a Better California, the main funder of efforts to defeat the wealth tax, noted that its allies included Democratic and Republican politicians, prominent labor groups and business leaders.

“It’s rare for such a broad coalition to unite around any single cause in California, but it reflects the potentially devastating impact of this measure on healthcare, education, and our state’s economy,” the group said in a statement.

Among the largest donors opposing the wealth tax are billionaires Sergey Brin, a co-founder of Google who has donated more than $100 million to anti-wealth-tax efforts, and former Google leader Eric Schmidt and venture capitalist L. John Doerr, who each kicked in $40 million.

Brin, Schmidt and Doerr did not respond to requests for comment.

US tech entrepreneur Sergey Brin and Gerelyn Gilbert-Soto arrive for the 2026 Met Gala celebrating “Costume Art” at the Metropolitan Museum of Art in New York in May.

(ANGELA WEISS/AFP via Getty Images)

The spending disparity also reflects a divide among Democrats and their allies, many of whom support wealth taxes, but argue that the way Proposition 40 was written is disastrous to California’s volatile budget, which is dependent on the state’s wealthiest residents.

Jodi Hicks, chief executive and president of Planned Parenthood Affiliates of California, said that while her organization would support a nationwide or a California wealth tax, their primary concerns are about 40’s impacts on the state budget and healthcare in the state.

“We are opposed to this particular proposal because we think it does more harm than good,” she said, adding that after what her organization “faced last year having to scramble for dollars because of [federal funding cuts] we are committed to work with the stakeholders facing cuts and not harming the budget and finding revenue in a smart way.”

The cash imbalance between supporters and opponents of the billionaire tax is vast. Those opposed to the measure raised $316.7 million, while proponents raised nearly $34.3 million.

The Fair Games Coalition, made up of community leaders, labor organizations and advocates, announce the launch of the Overpaid CEO Tax Initiative in front of the Tesla Diner in West Hollywood in January.

(Genaro Molina/Los Angeles Times)

The supporters of the wealth tax spent nearly all of their money gathering signatures to place the measure on the ballot. They had $1.6 million on hand as of Oct. 17.

Now, as voters cast ballots, their campaign appears reliant on public events and media coverage, such as of Sen. Bernie Sanders’ (I-Vt.) recent rally in support of Proposition 40 in downtown Los Angeles.

“What you are showing people from coast to coast and all over is that, yes, we can take on the greed of the oligarchs,” he said, calling it the most important ballot measure in the country. “Yes, we can create an economy and a government that works for all of us, not just the 1 percent.”

Facebook creator and Meta chief Mark Zuckerberg was among the California billionaires Sanders name-checked in his remarks. After Zuckerberg told company leaders that he planned to leave the state to avoid his control over the company substantially reduced by being forced to sell enough of his stock in the social media giant to pay the proposed levy, the company on Wednesday announced the creation of a new, non-voting 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.

Meta CEO Mark Zuckerberg listens as President Trump speaks to reporters at the White House on Sept. 29.

(Jacquelyn Martin / Ap Photo/jacquelyn Martin)

The pro-wealth-tax campaign is sending voters emails and texts and has an online presence.

“Remember: it’s not enough to vote YES on 40. You also need to vote NO on 41 + 42,” read an email sent to voters on Tuesday. “Don’t be fooled: Props 41 and 42 are billionaire-funded initiatives designed specifically to undermine Prop 40, the California Billionaire Tax.”

Meanwhile, the anti-40 and pro-42 campaigns are inundating voters on television, streaming services, in mailboxes, through online influencers and even in digital video games such as Sim City.

Jimenez said voters will see through the blizzard of campaign messaging.

“The billionaires think voters are stupid. They think they can bury the facts under millions of dollars in advertising and disguise Prop. 42 … as protection for ordinary taxpayers,” she said. “Their spending also makes our case for us. When billionaires can afford to spend millions a day protecting their fortunes, voters can see that billionaires have plenty of money to spare.”

Sheri Sadler, a veteran Democratic media buyer, questioned how much voters were hearing about the rationale for the proposed billionaire tax.

“The yes side is severely lacking in getting their message through while the no side is dipping into different kinds of pockets,” she said.

Jessica Levinson, an election law professor at Loyola Law School, said that beyond voter confusion about the competing ballot measures, it is certain to face legal challenges, notably about the retroactive nature of the tax, which would apply to any billionaire who lived in California as of Jan. 1. She described that as “the biggest legal pressure point.”

“It’s kind of a mess,” she said.

Times staff writer Gabrielle LaMarr LeMee contributed to this report.

Foes of Gov. Gavin Newsom, who is widely viewed as a likely 2028 presidential candidate, are launching television and digital ads this weekend in early primary states that criticize the governor’s opposition to the proposed billionaire tax on California’s November ballot.

The ad, funded by backers of the wealth tax, castigates Newsom for opposing Proposition 40, the ballot measure that would impose a 5% tax on California billionaires’ assets to offset federal healthcare funding cuts approved by congressional Republicans and signed by President Trump last year.

“We’re all struggling with the high cost of healthcare. In California, Democrats are championing a one-time tax on billionaires that would save coverage for millions,” a narrator says in the 30-second ad. “So why [has] presidential hopeful Gavin Newsom betrayed his own supporters by trying to sabotage the billionaire tax? Maybe it’s because the same billionaires who oppose Prop. 40 also gave millions of dollars to Newsom. Gavin Newsom turned his back on working Californians. Will he do the same to you?”

The ad specifically calls out billionaires Stewart Resnick, who owns several businesses including Pom Wonderful, Fiji Water and Justin Wines; crypto executive Chris Larsen; former Google leader Eric Schmidt; and venture capitalist Michael Moritz, all of whom have backed Newsom’s political ambitions.

Newsom has argued that, although he supports wealth taxes, they ought to be enacted at the national level, rather than a state-by-state patchwork that could drive the rich to leave California, a state with a volatile budget heavily dependent on the state’s wealthiest residents.

The primary funders of the ad are the Service Employees International Union – United Healthcare Workers West, which crafted Proposition 40; Saikat Chakrabarti, a climate change warrior and political advisor who made his wealth in part as a founding engineer at Stripe; and Ross Boucher, an early engineer at Stripe.

The ad buy is six figures but could grow, according to its backers. Among the states where the ad is expected to air are South Carolina, Nevada, New Mexico, Virginia and New Hampshire.

Earlier this month, Newsom stumped for candidates in New Hampshire, his latest foray to early presidential primary states.

The ad launch comes amid a contentious, expensive battle over the proposed wealth tax, which has divided Democrats and their allies. Although Newsom is among Democrats who oppose it, the ballot measure was endorsed by the state Democratic Party and Sen. Bernie Sanders (I-Vt.). Voters are closely divided about the measure.

Sen. Bernie Sanders, a hero among the nation’s progressive voters, stumped in Southern California on Monday for a wealth tax on the California ballot in November that has drawn hundreds of millions of dollars in campaign spending.

“What you are showing people from coast to coast and all over is that, yes, we can take on the greed of the oligarchs,” said Sanders (I-Vt.), who called Proposition 40 the most important ballot measure in the country. “Yes, we can create an economy and a government that works for all of us, not just the 1 percent.”

Sanders name-checked billionaire tech founders including Elon Musk of SpaceX, Mark Zuckerberg of Meta and Google co-founder Sergey Brin, whose mentions were repeatedly met with boos from the crowd gathered at the Novo in downtown Los Angeles.

Labor leaders, speaking earlier on Monday at a union training facility in La Palma, argued that although the billionaires tax is billed as a one-time tax on the assets of the state’s wealthiest residents, it includes a loophole that would allow state lawmakers to tax the savings and retirement accounts and home equity of all Californians.

“In the trades, we know you always read the blueprints and you always read the fine print,” said Xochitl Medrano, the political director for the district council of the Ironworkers of the State of California and Vicinity. Medrano was surrounded by union workers chanting, “No on 40!”

“Our workers are not billionaires; they are working people. After 20, 30, or even 40 years of breaking their backs on the job sites, our members have the opportunity to have a decent pension, some retirement savings, and equity in a home that they’ve been working to pay off,” she said. “That’s not wealth handed to them. That’s sweat equity. … We won’t stand by and let a tax that’s supposed to target billionaires turn into a trap door for working families.”

Proposition 40 is among the most contentious issues on the Nov. 3 ballot. The measure was crafted by a healthcare union to offset $100 billion in impending federal healthcare funding cuts approved by congressional Republicans and signed by President Trump last year. Millions of Californians could lose their healthcare coverage because of those cuts.

There are two opposing measures on the November ballot, Propositions 41 and 42, that would nullify the billionaires tax if either receives more votes.

About 45% of likely voters supported Proposition 40, while 42% opposed it and 13% were undecided in a late September poll by UC Berkeley and the Los Angeles Times. That’s a decline in support compared with a poll six weeks earlier, when 48% of likely voters supported it while 41% opposed it.

The proposal has drawn more than $300 million in campaign contributions, nearly all against it. Ballot measures are not subject to caps on campaign donations.

Sanders was joined by Rep. Ro Khanna (D-Fremont) and artists including the rapper Common, who called for “them billionaires to pay up” between freestyle verses. Shepard Fairey, known for his famous portrait of President Obama, unveiled banners in support of the wealth tax campaign, which served as a backdrop on the event stage.

Rally attendee Datosha Williams, an SEIU-UHW member who works in healthcare customer service, said Proposition 40 is a backstop to federal healthcare cuts, which could lead to hospital closures around the state.

“My biggest fear is that I will see some of my coworkers lose their jobs,” she said. “My biggest fear is that my 8-year-old son, who is asthmatic, will have long waits in an ER.”

At the event at the Ironworkers Training Center in La Palma organized by labor leaders to oppose the wealth tax, apprentices attended workshops about rigging and collective bargaining rights.

“We’re not opposed to making the wealthy pay their fair share. We’re not opposed to creating a high-quality and low-cost health insurance plan for Californians,” said Andrew Gonzales, the council representative for the Los Angeles and Orange Counties Building and Construction Trades Council. “We just don’t think Prop. 40 is the right vehicle to go about that.”

Gonzales pointed to the volatile state budget’s dependence on tax revenue from wealthy Californians, some of whom have proactively moved out of the state because of the proposal.

“That’s already having an immediate impact to the state’s budget,” he said. “So we already see the danger that can occur.”

Foes of Proposition 40 attend a rally on Monday at the Ironworkers Training Center in La Palma.

(Eric Thayer/Los Angeles Times)