The defeat of Proposition 40 preserves a status quo that the state’s richest residents paid handsomely to protect. A one-time 5% levy on billionaire wealth went down by just over five percentage points on election night, while a companion measure that would bar any future tax on that same cohort, Proposition 42, is on track to pass. The opposition raised nearly $425 million, the most expensive “no” campaign in California history, according to filings.
The money and the men
Sergey Brin, whose net worth sits around $230 billion, wrote the largest checks, contributing at least $132 million. Former Google chief executive Eric Schmidt followed with more than $48 million. Executives from Palantir, DoorDash, Stripe and Reddit added millions more, alongside a roster of prominent venture capitalists. The pro-tax side, backed by the union SEIU-United Healthcare Workers West, raised just over $31 million, outspent by a factor of nearly 14 to one.
The message machine
Over the final month, that war chest funded a saturation campaign of polished ads and mailers. The material framed the measure as an “everyone tax,” a “reckless experiment” and a warning that “you’re next.” Opponents argued the levy would worsen healthcare funding, while supporters insisted the revenue would offset losses from the federal One Big Beautiful Bill Act. The contradiction went largely unlitigated in the flood of paid media.
The political landscape
The measure faced headwinds beyond the spending gap. Governor Gavin Newsom and Governor-elect Xavier Becerra both opposed it. On election night, the counties that backed the tax were the familiar Democratic strongholds, Los Angeles, San Francisco and the broader Bay Area, where many of the targeted billionaires actually live. Rural, lower-income counties that otherwise swung toward Democratic House candidates rejected the measure by margins as high as 80%.
The playbook repeats
Rob Lalka, a Tulane business professor and author of *The Venture Alchemists*, drew a straight line to Uber and Lyft’s $200 million campaign against a driver-labor initiative in 2020. He described the template as misleading propaganda paired with purchased endorsements. The sums have only grown since. “Money in politics has only increased in California throughout this decade,” Lalka said. “That’s the context for” the current fight.