Californias Billionaire Tax Faces Strong Opposition from Wealthy Interests

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Billionaire Donations Exceed $300M in Opposition to Proposed Tax Measure

A recent flyer found in the mailbox of University of California at Berkeley economics professor Brian Galle revealed that tech billionaires have raised over $300 million to oppose a proposed tax measure. The measure, known as Prop 40, aims to impose a one-time tax of 5% on the assets of California’s billionaires.

According to David McCuan, professor of political science at Sonoma State University, this has made it the most expensive ballot measure in state history and one of the most expensive campaigns of the midterm. The billionaire donors include Google co-founder Sergey Brin, Doordash founder Tony Xu, Stripe co-founder Patrick Collison, Ripple co-executive chairman Chris Larsen, and venture capitalists John Doerr, Michael Moritz, and Vinod Khosla.

In contrast, supporters of the tax measure have raised only $32 million. The disparity in funding has led to a significant advertising campaign by the billionaires, as well as outreach efforts to voters.

Volunteers for Patriotic Millionaires, a group that supports the tax, have reported encountering misinformation about the measure during their door-knocking and phone-banking efforts. Ashley Craig, a volunteer, stated that some individuals have told her that the tax would include secret provisions allowing everyone to be taxed, which is not entirely true.

The proposed tax measure would require a two-thirds majority in the assembly and must adhere to its original spirit. However, the prevalence of the ads has led to concerns among voters that the tax would soon apply to them as well.

The US Supreme Court’s judgement in the Citizens United v FEC case has allowed companies and special groups to spend freely in elections, contributing to this situation. According to Francesco Trebbi, BT Rocca professor of Business and Public Policy at the University of California at Berkeley’s Haas School of Business, this has given billionaires like Sergey Brin a significant voice in politics.

The state Democratic party has endorsed the tax proposal, but Craig reported that she has not received ground support from the party. Sonoma State’s McCuan attributes this to internal rifts within the party between progressives and moderates, with the former supporting the policy and the latter resisting it.

Source: Al Jazeera