Wealthy Californians are understood to be assembling legal arguments against a proposed billionaire tax measure ahead of a potential early-November ballot outcome. Backers drawn from the upper tier of the technology industry have pooled more than $340 million in opposition to Proposition 40, a ballot measure that would place a one-time five-percent charge on large personal fortunes to fund healthcare and education initiatives, media reports indicate.
According to state financial disclosure filings, those campaigning against the measure are spending roughly $1 million per day in their effort to defeat it. Proposition 40 is headed to California voters, with the ballot measure scheduled to go before the electorate in the first days of November.
Under the proposal, the state's wealthiest residents would face a one-time levy of 5 percent on their assets, with the bulk of the revenue directed toward healthcare and smaller portions allocated to education and food assistance. Labeled as a measure reaching well past conventional income taxation, Proposition 40 would levy a 5% charge on the assets — not just the earnings — of California residents whose total wealth exceeds $1 billion. Under the proposal, a billionaire's full wealth would be subject to the levy, with the obligation extending to those who lived in the state at any point from January 1, 2026 onward, according to a broadcast news outlet.
Within the state's Democratic ranks, the proposal has drawn a split reaction — backers rallying behind it while opponents point to its structure as a single-charge levy whose proceeds would flow primarily toward specific healthcare programs. Both those who support and those who oppose the tax on billionaires have described it as a possible opening move toward broader wealth-based levies spreading across additional states.
Proposition 40's potential to influence wealth-gap debates elsewhere in the country draws added attention given that California holds a higher concentration of billionaires than any other state. Figures from a news outlet put the number of billionaires living in California at around 250.
Support for Prop 40 has come from the state's labor unions alongside elected officials including Vermont's Bernie Sanders and California's Ro Khanna. Support for the effort comes from Senator Bernie Sanders alongside the labor group SEIU United Healthcare Workers West.
Opposition to the measure spans the political spectrum, with both major-party gubernatorial nominees aligned against it alongside advocacy groups such as Planned Parenthood Affiliates of California. Among the groups lined up against the measure are the California Primary Care Association, the California School Boards Association, and the California Taxpayers Association.
Rob Lapsley, who heads the California Business Roundtable — an organisation through which a number of the state's prominent corporations coordinate advocacy efforts — told a broadcast outlet that the group would take the lead on any court-based challenges. Elizabeth Prelogar, who previously held the solicitor general post during the Biden administration, has been brought aboard to guide the group's litigation work, while Lapsley told a news outlet that the strategy for countering Proposition 40 runs along both electoral and court-based tracks, with a lawsuit ready to be filed should the ballot result call for that step — a plan being shaped in close coordination with high-net-worth individuals whose tax exposure under the measure stands to be affected, according to people with knowledge of the matter.
Opponents of taxes on accumulated wealth had reportedly turned their attention to the Supreme Court's review of Moore v. United States. The ruling kept its scope tight, upholding the tax on the terms before it while leaving untouched the broader question of how wealth-based levies might be evaluated going forward.
Campaign disclosures show the California Business Roundtable's political arm directing a minimum of $700,000 toward defeating Proposition 40. Those who campaigned against the billionaire tax measure placed advertising across television, digital, and streaming platforms throughout California.
In the ad's opening moments, René Bravo — identified as president of the California Medical Association and dressed in a white lab coat — conveys to viewers that supporters of Prop 40 describe the measure as a path to better healthcare. A broadcast outlet described the claim as inaccurate. Centred on figures such as doctors, small-business owners, and public safety workers — with teachers, carpenters, and firefighters among those reportedly shown calling the proposed wealth tax a "dangerous experiment" — the advertisements made no mention of how residents at the upper end of the income scale would be affected by the measure.
Opponents of Prop 40 have branded the measure an across-the-board tax, while campaign finance records show that the three groups working to defeat the wealth tax draw nearly all of their backing from Super PACs whose donors are concentrated in Silicon Valley. Fundraising disclosures show that committees aligned against Prop 40 and in favour of Props 41 and 42 have collectively drawn in upwards of $297.8 million since July, with the bulk of those dollars flowing from a Super PAC operating under the name Building a Better California.
Financial backing for the no campaign drew from a range of technology industry figures, with news reports identifying Palantir co-founder Peter Thiel, former Google chief executive Eric Schmidt, DoorDash chief Tony Xu, Stripe's Patrick Collison, and cryptocurrency figure Chris Larsen among the donors, alongside several venture capitalists whose names have also appeared in coverage. Campaign finance records show that Sergey Brin, a co-founder of Google, has directed no less than $102 million toward defeating the proposed tax. Contributions attributed to Schmidt have reached a total exceeding $42 million.
Fundraising for the yes on 40 campaign has reached approximately $33 million, with the bulk of that money coming from the healthcare union backing the ballot measure.
Polling numbers for Prop 40 point toward passage, though the margin of support has narrowed over recent weeks as the campaign against the measure has ramped up its financial activity. Figures from a University of California survey conducted in late September placed support for the tax measure at 45 percent against 42 percent in opposition — a gap that had stood at seven points in favour just four weeks prior.
Propositions 41 and 42 — two distinct ballot measures placed there by those opposing Prop 40 — were both set to appear before voters that November. Where Prop 41 takes aim specifically at the billionaire tax, Prop 42 casts a broader net, seeking to shield individuals from certain newly imposed levies. Under the rules governing these ballot measures, whichever one draws a higher share of affirmative votes than Prop 40 would block the wealth tax from taking hold — regardless of whether that tax clears its own passage threshold.
