More than $351 million in political donations has been poured into a high-stakes contest about a proposed wealth tax on the November ballot, making it one of the most costly campaigns in California history. About 90% of the money is being spent to defeat a statewide initiative to impose a new tax on the assets of billionaires, a multifaceted opposition effort bankrolled primarily by ultra-rich Californians being targeted by a measure that supporters call an economic reckoning. The billionaire tax, Proposition 40, would levy a one-time, 5% tax on many assets of California billionaires who lived in the state as of Jan. 1.
Millions of dollars continue to flow into the campaigns of three intertwined ballot initiatives at the center of the debate: Proposition 40, and Propositions 41 and Proposition 42, which would neuter the Proposition 40 through strategic, esoteric tax law changes. That is a very, very large advantage few campaigns ever get to have.” But, Stutzman warned, money does not guarantee a win. In the most expensive ballot measure fights in California history, $463 million was spent on two gambling proposals 2022.
The initiatives pitted some of California’s most successful Native American tribes with gaming interests against gambling corporations, including online sports gaming companies DraftKings and FanDuel. Both side’s measure failed. The tax measure was crafted by Service Employees International Union-United Healthcare Workers West in response to federal healthcare funding cuts signed by President Trump last year that are expected to reduce California’s healthcare budget by $100 billion, burdening the state’s most vulnerable residents.
Hospitals and emergency rooms face closure. Patients will die unnecessarily when the care they need is no longer there. Proposition 40 is an emergency response to that looming disaster.” The proposition’s supporters raised $34.3 million, nearly all of it from Jimenez’s union.
The two other measures, Propositions 41 and 42, would nullify the billionaire tax if either receives more votes. Proposition 41 supporters say the measure aims to cut wasteful government spending by requiring audits for new state special taxes and would bar new state taxes that exempt their revenue from a state spending limit. Backers of Proposition 42 argue it would prohibit new taxes on retirement holdings, individually owned assets and other forms of personal savings.
Advocates for the billionaire tax say both are well-financed smokescreens to undercut Proposition 40. Opposition campaigns to the wealth tax as well as the two countermeasures have received enormous donations from several of the state’s billionaires. But Building a Better California, the main funder of efforts to defeat the wealth tax, noted that its allies included Democratic and Republican politicians, prominent labor groups and business leaders.
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