FT: California's wealthy invest big money in campaign against wealth tax

Based on the so-called Proposition 40, which is supported by the healthcare workers' union, it is planned that the wealthy with assets exceeding a billion dollars will pay a one-time tax of five percent

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Photo: Shutterstock
Photo: Shutterstock
Disclaimer: The translations are mostly done through AI translator and might not be 100% accurate.

California billionaires have invested nearly $40 million in a campaign against a proposed wealth tax that will be on the ballot in this US state in November, the Financial Times reports today.

Proposition 40, backed by the healthcare union, would impose a one-time 5 percent tax on wealthy individuals with assets exceeding $1 billion. The tax would apply to California residents who were in that status on January 1 of this year, with 90 percent of the proceeds going to health care, with the remainder going to education and food assistance.

Proposition 40 is also supported by the California Democratic Party, but is opposed by California Governor Gavin Newsom, also a Democrat, who fears that the tax would drive wealthy people to other US states and weaken California's tax base.

And the rich have formed a group called Build a Better California to fight Proposition 40, and it has raised an impressive sum of money for the purpose, the FT reports.

By the end of June, Build a Better California had raised more than $110 million from a dozen different donors. That amount is now $40 million higher.

As of August 14, Chris Larsen, CEO of blockchain company Ripple, has invested $10 million. Venture capitalist John Dore contributed $7,5 million, investor John Herring contributed $946.000, and Greenocks Capital founder Neil Mehta contributed $250.000.

The group Build a Better California has given $5 million to the campaign against Proposition 40. It has given the same amount to campaigns supporting two rival referendum initiatives – Proposition 41 and Proposition 42 – that would repeal Proposition 40 and impose limits on tax burdens and state spending in California.

Two weeks earlier, the group received a $20 million donation from Google co-founder Sergey Brin. His total contribution to the group so far is over $100 million.

Brin moved to Nevada before January 1, 2026, to avoid falling under the new law if it is passed in a referendum as part of the US midterm elections in California.

However, they, like other wealthy people with a similar idea, could find themselves under attack by tax authorities to determine whether they have truly changed their residence.

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