California Billionaires’ Voting Data and Prop 40 Fight Reach Climax

Key points

• Proposition 40 proposes a one-time 5% tax on the net worth of California billionaires, targeting assets held by residents as of January 1, 2026.
• Opponents, led by Sergey Brin’s 'Building a Better California,' have spent over $304 million to defeat the tax and pass counter-measures Propositions 41 and 42.
• Economists disagree on the tax’s impact: UC Berkeley’s Gabriel Zucman estimates $100 billion in revenue, while Stanford’s Joshua Rauh predicts a $39 billion net loss due to capital flight and legal challenges.
• POLITICO’s analysis of 166 matched billionaires shows 36% are registered Democrats, 39% have no party preference, and fewer are Republicans, contradicting the assumption that wealth correlates with Republican affiliation.
• Despite high spending, support for Proposition 40 has dropped below 50% in recent polls, with opponents outspending supporters by a 10-to-1 ratio.

Background

The debate over Proposition 40 follows a broader national trend of proposals to tax the superrich, echoing the 1978 Proposition 13 tax revolt but in reverse. Previous coverage highlighted the unprecedented unity among Silicon Valley donors, who have coordinated through organizations like 'Building a Better California' to influence state policy beyond the immediate tax fight. The measure aims to offset federal healthcare cuts, with 90% of proceeds directed to healthcare and 10% to education and food assistance.

How outlets are covering it

Supporters, including economist Gabriel Zucman and progressive leaders like Bernie Sanders, argue the tax is necessary to address inequality and fund healthcare, estimating $100 billion in revenue. They contend that agglomeration effects in Silicon Valley will keep billionaires in the state despite the tax. Opponents, led by Sergey Brin and economist Joshua Rauh, argue the tax will trigger capital flight, reduce income tax revenue, and face legal challenges, potentially costing the state $39 billion. Rauh notes that at least seven billionaires, including Larry Page and Peter Thiel, have already left California, reducing potential revenue. POLITICO’s voter data adds a new dimension, showing that many billionaires are registered Democrats or independents, challenging the narrative that the ultra-wealthy are predominantly Republican. This data suggests a more complex political landscape, with some billionaires aligning with progressive causes despite their wealth.

Why it matters

The outcome of Proposition 40 could set a precedent for wealth taxation at the federal and international levels. If passed, it may influence future tax policies and political dynamics, potentially reshaping the relationship between the ultra-wealthy and state governments. The record spending and political coordination among billionaires also highlight the growing influence of the ultra-wealthy in shaping political outcomes, raising concerns about the balance of power in democratic processes.

What to watch

Voters will decide on Proposition 40 and related measures on November 3, 2026. If the tax passes, it could trigger legal challenges and further capital flight, while a defeat may solidify the political infrastructure built by billionaire opponents for future campaigns. The outcome will also influence national debates on wealth taxation and the role of the ultra-wealthy in politics.