I was doing our usual kitchen-table money check-in when my husband slid his phone across the table: a Google co-founder had just crossed $102 million in donations to fight California’s proposed billionaire tax. We looked at each other. He said, “That’s more than our food budget in a bad month.” It was true. And it made me want to understand what the tax actually is, and what all that money is for.
Proposition 40 would impose a one-time 5% tax on the wealth of Californians worth more than $1 billion. Supporters say it could raise about $100 billion over five years, with 90% going to health care and the rest to food assistance, education and administration. Voters will decide in November.
This is a news breakdown, not professional tax advice — but it’s the kind of money story worth understanding, even if you’re nowhere near a billion dollars.
The money so far: who’s paying what
Campaign finance records show the biggest individual opponent is Sergey Brin, who donated another $20 million to Building a Better California, bringing his total to $102 million. The group opposes the tax while also backing pro-business measures on housing and infrastructure affordability.
He’s not alone. Chris Larsen gave $5 million to Golden State Promise, a committee against the measure, and Ripple Labs, the company he co-founded, contributed another $5 million. A separate committee representing teachers, doctors and small businesses received $5 million from Building a Better California, whose leading donors include Brin and venture capitalist John Doerr. Golden State Promise also took in $450,000 from the California Business Roundtable Issues PAC, whose top donors include Palantir co-founder Peter Thiel, who has given the organization $3 million.
For a measure that would touch only a small number of residents, the check sizes are historic.
Why Brin’s exposure is real (and huge)
Brin’s reported net worth approaches $270 billion. At 5%, that’s a bill exceeding $13 billion. So when state records now list Nevada as his residence, and reports say he bought a $51 million home near Miami Beach earlier this year, it’s hard to call it coincidence.
The same math applies to anyone who crosses the line. Someone with $1.1 billion in taxable wealth would owe $55 million under a 5% assessment. I ran that number with my Wealth Planner, and the point he kept making was simple: one-time taxes change what people do before the tax is even final. People move. Entities get relocated.
It’s already happening. Thiel officially cut ties with California in 2025. Google co-founder Larry Page has moved several business and nonprofit entities out of the state, including his family office, Koop, which is incorporated in Delaware. Others reportedly expected to leave include Don Hankey, former Uber CEO Travis Kalanick and director Steven Spielberg.
Mark Cuban vs. Ro Khanna: the “cash poor, stock rich” argument
While the money is flowing, there’s a very public fight over whether the tax would actually hurt the tech industry. Mark Cuban says startup founders can be billionaires on paper because of soaring company valuations, without the cash to pay a net-worth tax. His words: “They are the definition of cash poor, stock rich.” He warned that if the measure passes, “only idiot startup founders stay in Cali,” and said he’d “make NOT being in California a prerequisite for an investment.”
Rep. Ro Khanna, D-Calif., says the concern mainly applies to founders whose wealth is tied up in private companies. His solution: let founders pledge company shares as collateral for a nonrecourse government loan of roughly 10 years, used to pay the tax. At the end, the founder repays in cash, or the government takes the pledged shares. If the company fails, the founder isn’t personally liable. He also notes that 72% of billionaire wealth is held in public stock, so this mechanism targets a narrow group.
Cuban’s response: “Ro, that’s insane.” His objection is mechanical — California lends the money, the founder immediately pays the state tax with it, and if the loan isn’t repaid, the state could end up owning part of a private company. “You don’t understand business Ro,” he shot back when Khanna challenged him to ask voters how they feel about a billionaire tax. Khanna’s counter, after that challenge: “Most say, I promise you, why only 5 percent?”
Gavin Newsom: a Democrat on the other side
Here’s the part that surprised me. Proposition 40 has backing from the California Democratic Party and labor groups, but Democratic Gov. Gavin Newsom opposes it. He argues the measure would ultimately weaken the state’s tax base: “The fact is it actually will reduce investments in education,” he said. “It will reduce investments in teachers and librarians, childcare. It will reduce investments in firefighting and police.”
His argument is the same one the billionaires are making: if wealthy residents leave, the revenue for those programs shrinks too.
What the researchers say about the exodus
The exodus argument produces competing numbers. Proponents cite estimates that six billionaires expected to leave — Brin, Page, Thiel, Hankey, Kalanick and Spielberg — could collectively account for about $27 billion in tax revenue, roughly one-fourth of what Proposition 40 is projected to raise.
A National Bureau of Economic Research working paper looks at it differently. California billionaires paid about $4.1 billion in income taxes in the previous year, equal to about 0.2% of their collective $2 trillion net worth. By that math, it could take roughly 25 years of lost income-tax revenue to offset the $100 billion the measure could raise. Even if a quarter of the state’s billionaires left, the researchers estimate it would take about a century to equal the projected proceeds.
The authors’ summary: “The proposed one-off California billionaire tax of 5%, payable over five years, is both small relative to California billionaires’ wealth gains and large relative to the taxes they currently pay.”
There’s also a softer option in the debate. Emmanuel Saez, who co-authored an expert report supporting the measure, says founders without enough cash could use a deferral option: pay 5% of whatever proceeds they take out of their business as dividends or stock sales, moving forward. “If the business fails, they won’t have to pay anything,” he said. “If the business succeeds, they’ll have to pay 5% of that success eventually.”
What it means for the rest of us
Supporters call Proposition 40 a manageable one-time assessment on a very small group. Opponents call it a precedent that could make California less attractive to entrepreneurs and investors. And the fight is spilling out of the state: in March, Khanna and Sen. Bernie Sanders, I-Vt., introduced federal legislation proposing an annual 5% wealth tax on Americans worth more than $1 billion, with some proceeds earmarked for $3,000 payments to lower- and middle-income households.
California has an economy of roughly $4 trillion, deep income inequality and a high cost of living, and this ballot measure has become a test case for whether Democrats can sell a billionaire wealth tax nationally — with 2028 rivals Newsom and Khanna now on opposite sides.
The bigger lesson for normal households is this: taxes change behavior, and the people with the most to lose write the biggest checks to influence them. That’s exactly what we’re watching. The only question left is what you think about it — and if you live in California, what you’ll do in November. Today’s small action: read one source from each side of Proposition 40 before you form an opinion. The money has already spoken. Yours should too.
As always, this is a news breakdown, not professional tax advice. Your situation may be different — run the numbers before you decide.