One year ago, the idea of a billionaire tax in California was still in its infancy. It wasn’t yet one of the most contentious ballot measure fights in state history – pitting Democrats against Democrats, drawing national attention from political heavyweights, and netting hundreds of millions of Silicon Valley dollars to fight it. Back then, it was a bold and desperate answer to Donald Trump’s healthcare cuts.
Trump had just signed the One Big Beautiful Bill Act, which dictated a trillion dollars of Medicaid, Affordable Care Act and other healthcare funding be cut over the next decade to offset sweeping tax cuts. When the bill goes into effect in January, that could mean more than 3.4m Californians will lose their coverage, including millions of children. The proposal would levy a one-time 5% tax on billionaires living in the state as of 1 January 2026, the proceeds of which would fund healthcare programs, along with some education and food assistance.
The initiative has its critics, even among Democrats, who point at its structure as a one-off tax that would only fund certain healthcare programs. But its most vocal critics have been billionaires. The idea of taxing the Golden State’s ultra-wealthy has snowballed into a messy brawl over the last year.
Progressive politicians have become bedfellows with tech billionaires, opposition ballot measure campaigns have been mounted, Signal chats leaked, and boatloads of money have been spent. Tech billionaires have treated the proposal as an existential threat, dumping upwards of $356m into “independent expenditure-only” political action committees (Super Pacs) to stop it. In the first two weeks of October, according to the most recent campaign filings, the opposition campaign spent more than $42.8m – surpassing $2.5m per day.
That money went to an army of consultants, who have been tasked with lobbying politicians, blanketing the airwaves with ads and placing op-eds in Latino newspapers across the state. During one packed event in San Francisco earlier this month, Vermont’s Bernie Sanders said: “The whole country, and frankly people from around the world, are paying attention to what is happening here.” While Prop 40 is just one ballot measure election in one state, it is causing ripple effects nationwide. It comes at a time when affordability is top of mind and the disparity of wealth in the US hasn’t been so stark since the Great Depression.
McCuan said the billionaires’ big spend was partially due to a fear of contagion to other states. Likewise, supporters say they hope the proposed tax is a harbinger for referendums on wealth inequality across the country. Regan and his union got started on their endeavor last summer.
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