Committees working for and against three potential California ballot initiatives related to a billionaire wealth tax have already raised $123.7 million.
The healthcare union Service Employees International Union-United Healthcare Workers West (SEIU-UHW) has directed more than $30 million to its campaign supporting the proposed Billionaire Tax Initiative. The measure would impose a one-time 5% tax on individuals or married couples with certain assets exceeding $1 billion. Under the initiative, revenues derived from the tax would go toward state healthcare, education and food assistance programs.
But a handful of billionaires have collectively contributed more than $116 million across political committees and groups working together to defeat the initiative in two ways – by directly opposing it and also by supporting two of their own initiatives that would block the tax from taking effect.
Three direct opposition committees and two supporting the competing measures have already received $93 million of those funds, with $82.5 million coming from Building a Better California.
The donor group – dominated by Silicon Valley executives tied to Affirm, DoorDash, Google, Palantir, Ripple and Stripe – has a combined estimated net worth of roughly $437 billion. On average, each billionaire gave about 0.06% of their net worth. Google co-founder Sergey Brin alone accounted for more than half of the billionaire funding identified, contributing $66 million to Building a Better California.
Building a Better California, which is sponsoring two competing ballot initiatives designed to block the Billionaire Tax Initiative, has received $102 million from 10 donors.
What is the Billionaire Tax Initiative?
The Save California Healthcare and Public Education committee, sponsored by SEIU-UHW, submitted 1.55 million signatures on April 27 to qualify its Billionaire Tax Act initiative for the November ballot. The state has until June 24 to validate the signatures and place the initiative on the November ballot.
Under the initiative, assets factored into a person’s net worth would include businesses, securities, art, collectibles, intellectual property, and Roth IRAs and similar accounts worth $10 million or more. Real property and pensions would be excluded from net worth calculations, and the initiative would limit the types of debts and liabilities that could be used to reduce taxable net worth.
“The immense and growing fortunes of billionaires bring privileges inaccessible to most. Whereas nurses, teachers, firefighters, and tech workers alike pay taxes on nearly all of their earned income, billionaires can shield enormous sums from taxation. Their primary assets – stocks, businesses, real estate – grow in value year after year, but because this growth is taxed only at sale and billionaires often need not sell, they pay no tax on their rising fortunes,” the initiative reads. “Moreover, when these types of assets are passed to heirs, current laws enable billions of dollars in untaxed wealth to be inherited without ever triggering an income tax bill. Many also employ complex financial strategies to relocate wealth ‘on paper’ while, in reality, continuing to benefit from California’s economy and infrastructure.”
The union has argued that the additional revenues are urgently needed due to federal funding cuts impacting California’s healthcare, education and nutrition programs.
Through May 5, The Save California Healthcare and Public Education committee reported raising $30.7 million ($22 million cash and $8.7 million in-kind). All of the funds aside from $3,241 in small donations came from the SEIU-UHW. The union contributed $21.3 million while its political issues committee contributed $9.39 million.
Democratic billionaire, climate activist and California gubernatorial candidate Thomas Steyer supports the initiative, though he has not yet directly contributed to campaign’s ballot measure committee. “For years, I’ve been calling for higher taxes on corporations and billionaires – like me. It just makes good economic sense. When we tax the wealthy and corporations to invest in working people and families, everyone does well,” he said.
Speaking at a rally in support of the initiative, Sen. Bernie Sanders (I-Vt.) said, “I’ve heard a little bit about what the billionaires intend to do in this particular campaign. They’re raising a lot of money from their very rich friends, and they’re going to be spending a lot of money on TV ads … Their ads will not be saying, ‘We are billionaires and we don’t give a damn about anybody else. We want it all. Vote down this referendum,’” Sanders said. “What they essentially are saying is, ‘If you stand up to us, and if you think it’s more important that children get healthcare than we get massive tax breaks, we are going to punish you, we’re going to move, we’re going to shut down businesses here.’”
Speaking about Google’s Brin who has given $66 million to defeat the initiative, Sanders said, “Mr. Brin, you are worth $245 billion. Since Trump was elected, you have become over $100 billion richer. Listen to the needs of working people. Stop threatening the people of California. Start paying your fair share of taxes.”
Direct opponents have raised $10.5 million
Golden State Promise, a committee registered to oppose the initiative, and the California Business Roundtable announced a strategic partnership to coordinate opposition to the Billionaire Tax Initiative. Golden State Promise has so far received $10 million in donations – $5 million from Ripple Labs and another $5 million from its CEO, Chris Larsen.
The California Business Roundtable Issue PAC has so far directed $95,000 to its committee Californians Against Tax Increases. The PAC is sitting on millions of dollars, having received $3 million from Palantir co-founder Peter Thiel, $1 million from former Google CEO Eric Schmidt (now CEO of Relativity Space) and $750,000 from Ripple Labs CEO Chris Larsen.
Another committee opposing the initiative, Stop the Squeeze, reported contributions of $400,000. The committee was established by political strategists Dan Newman and Brian Brokaw, who previously worked as advisers to Democratic Gov. Gavin Newsom. The governor, who cannot seek another term having already been elected twice, opposes the Billionaire Tax Initiative, citing the exodus of billionaires from the state resulting in lost tax revenues and negative effects on innovation in California.
“The issues that are really going to be motivating Democrats this year, affordability and the cost of healthcare and cuts to schools, none of these would be fixed by this proposal. In fact, they would be made worse,” Brokaw said.
California Billionaires have given $102 million to competing proposals
Billionaires are funding a committee, Building a Better California, which submitted signatures on May 7 for two initiative campaigns that would compete with the Billionaire Tax Initiative. The initiatives will appear on the ballot if at least 874,641 signatures for each initiative are deemed valid. If more than one of the three initiatives are approved, the option with more votes would prevail.
The first initiative, referred to as the “Stop the Savings Tax” initiative, would prohibit any statewide initiatives creating new taxes on retirement accounts, financial assets, business interests or other forms of personal savings. It would also prohibit taxes that apply retroactively.
The second initiative also directly targets the Billionaire Tax Initiative, and would prohibit new state taxes that are exempt from the state’s constitutionally mandated spending limit. It would also require the state auditor to conduct recurring audits of programs funded by new special taxes to be completed every four years.
Building a Better California has directed $82.5 million to its two committees, Californians to Protect Retirement and Life Savings and Californians for a More Transparent and Effective Government, through April 17.
The committees have also received $44,345 from Republican Assemblymember Carl DeMaio, who represents northern and eastern portions of San Diego County, and $4,500 from Reform Local Government PAC, a committee with a goal of “helping working families afford to live in California by defeating tax hikes and costly government mandates.”
DeMaio told Fox 5 San Diego, “No one likes billionaires, we always want to stick it to the rich people. And the Democrats know that. But recognize it’s not a billionaire’s tax. This is an everyone’s tax. The billionaire’s tax creates a new form of taxation called a savings tax, where they go after your 401k, your equity in your home, whatever you have in your savings account if you manage to scrimp and save in California’s high cost of living. They want to create this new form of taxation. They’re doing it under the window dressing of, oh, we’re only gonna charge this to the billionaires. … They want to tax the little guy, not the billionaire.”
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