Why are tech billionaires spending over $333 million to stop Prop. 40, and what happens if competing measures outpoll it anyway?

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Tech billionaires are spending more than $333 million because Prop. 40 could cost a small group of California residents enormous sums and, in their view, create a new precedent for taxing wealth rather than income. The measure would impose a one-time 5% tax on worldwide net worth above $1 billion for people who were California residents on Jan. 1, 2026. For someone like Sergey Brin, reports have estimated the liability in the tens of billions of dollars. Opponents also argue the proposal could push wealthy residents and assets out of California, reduce future income-tax receipts, create hard-to-manage valuation disputes over private companies and other illiquid assets, and trigger years of constitutional litigation. Supporters dispute those claims, saying the tax is feasible, would fall only on roughly 200 to 250 billionaires, and could raise tens of billions for healthcare, schools and food assistance at a time of budget pressure. Economists backing the measure say California can value most assets using existing methods and that a one-time levy would not seriously damage the state’s economy. Even if Prop. 40 wins majority support, it can still fail. That is because Propositions 41 and 42 were drafted as competing measures. Under California’s rules for conflicting ballot initiatives, only the measure with the highest vote total among the competing propositions prevails. So if either Prop. 41 or Prop. 42 receives more “yes” votes than Prop. 40, the billionaire tax would be bl…

California Billionaires Pour $333 Million Into Fight Against 5% Prop 40 Wealth Tax

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California Billionaires Pour $333 Million Into Fight Against 5% Prop 40 Wealth Tax

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