One Million Dollars a Day: The Fight to Kill California's Billionaire Tax

One Million Dollars a Day: The Fight to Kill California's Billionaire Tax

Opponents burn $1m a day to kill Prop 40

The Guardian reported on 16 October that in the first 19 days of September the campaign against Proposition 40 spent at least $21.2 million — more than $1 million a day — on robotexts, mailers and advertising across television, streaming and social platforms. Filings show the three committees opposing Prop 40 and supporting Props 41 and 42 have raised more than $297.8 million since July, most of it from a super PAC called Building a Better California. Opposition fundraising in total has passed $340 million.

A one-time 5% levy on roughly 200 billionaires

Prop 40, formally the 2026 Billionaire Tax Act, would impose a one-time 5% tax on the net worth of individuals and certain trusts who were California residents on 1 January 2026 and are worth $1 billion or more. The tax phases in between $1 billion and $1.1 billion, measures net worth as of 31 December 2026, and can be paid in five annual instalments; real estate and many retirement accounts are exempt. Proponents estimate roughly 200 people would owe it, raising about $100 billion, with 90% earmarked for healthcare and 10% for education, food assistance and administration.

Federal healthcare cuts are the pitch

The measure is sponsored by SEIU-United Healthcare Workers West, a hospital workers' union. It says California stands to lose about $100 billion in federal healthcare funding over five years; the California Budget & Policy Center puts the annual Medi-Cal shortfall at roughly $30 billion. State health officials estimate as many as 3.4 million enrollees could be affected, and Covered California premiums are expected to rise 9.9% on average in 2027.

The governor says no — and backs Prop 42

Governor Gavin Newsom opposes the tax and on 9 October endorsed Proposition 42, which would bar new taxes on financial assets and on personal property other than real estate. He argues the levy would cut spending on schools, teachers, firefighting and policing. The California Teachers Association, the California Medical Association and Planned Parenthood of California also oppose it. Senator Bernie Sanders, Representative Ro Khanna and the state Democratic Party support it.

The yes side has a tenth of the money

Committees backing Prop 40 have raised about $32 million, mostly from the union, plus roughly $369,000 from a group called Tax the Ultra-Rich Now. AdImpact data cited by the Bay Area News Group shows opponents have booked or spent about $96 million on television and digital advertising, against just $209,000 for supporters.

Brin alone gave $102 million

The largest single donation is $102 million from Google co-founder Sergey Brin, whose net worth Fortune puts near $260 billion and whose tax bill could reach about $13 billion if the measure passes. Former Google chief executive Eric Schmidt has given more than $42 million. The donor list also includes Peter Thiel, DoorDash's Tony Xu, Stripe's Patrick Collison and crypto investor Chris Larsen.

Six billionaires left before the cutoff

Media tallies put it at six billionaires — Brin, Larry Page, Thiel, auto-finance magnate Don Hankey, Uber co-founder Travis Kalanick and filmmaker Steven Spielberg — who left California before the 1 January residency date. Had they stayed, they would have generated about $27 billion in tax revenue over five years, roughly a quarter of the $100 billion the measure is meant to raise. The Franchise Tax Board is preparing to audit residency and worldwide assets. Nvidia's Jensen Huang offered the counterpoint, saying he would gladly pay about $8 billion as "a privilege".

Support slipped from 48% to 45%

A September poll by UC Berkeley's Institute of Governmental Studies found 45% of likely voters in favour, 42% against and 13% undecided, down from 48% to 41% six weeks earlier. The Public Policy Institute of California reported 52% yes to 46% no, while a Manhattan Institute poll found only 35% support against 50% opposition. Prop 41 leads 51% to 44% and Prop 42 leads 54% to 43%.

Two companion measures could nullify the tax

Prop 41 would subject new taxes to the state's existing spending limit; Prop 42 would prohibit taxes on financial assets. If either wins more votes than Prop 40, the billionaire tax could be blocked even if it passes — the reason opponents are spending so heavily.

Hospitals and low-income enrollees bear the risk

The pressure lands on providers that rely on Medi-Cal. The union says emergency rooms and hospitals face closure; Public Citizen lists 83 hospitals at high risk. California's top 1% already pay nearly half the state's income taxes, and the budget's dependence on them is central to the governor's and business groups' objections.

November 3 ballots, then a court fight

Prop 40 and its two companion measures are among 14 propositions on the 3 November ballot; mail ballots went out in early October. The California Business Roundtable says it would lead legal challenges if the measure passes, with retroactivity and apportionment the likely battlegrounds. Either way, a fight that has cost more than $215 million will be written into California's election ledger.