California's billionaires have spent $40 million fighting a 5% tax on their fortunes

California's billionaires have committed nearly $40 million of fresh money to defeating a wealth tax that reaches voters on Nov. 3, the Financial Times reported.

The Billionaire Tax Act would take 5 percent of the net worth of every California resident holding more than $1 billion, in a single levy affecting roughly 200 people. It captures privately held businesses, stocks, bonds, art, collectibles and intellectual property, exempts real estate and most retirement accounts, and directs the proceeds to Medi-Cal, food assistance and public education.

SEIU United Healthcare Workers West submitted 1.6 million signatures in April against a threshold of 874,641, and puts the yield at $100 billion.

The money against it started moving in December, when Peter Thiel gave $3 million to the California Business Roundtable, his largest disclosed political contribution since he spent more than $35 million on the 2022 midterms. Bay Area billionaires then put $35 million into a political action committee, Building a Better California, which qualified three counter-initiatives designed to kill or dilute the measure. The campaign booked close to $87 million of television time across the state in July.

State analysts have handed each side an argument. California's Legislative Analyst's Office concluded the tax would raise up to tens of billions of dollars once, and cost the state hundreds of millions a year in income tax afterwards as billionaires leave.

Six have already gone, according to Bloomberg, taking an estimated $26.8 billion of the $100 billion the union is counting on. Miami has picked up part of the traffic, with 24 homes selling above $30 million in Miami-Dade County in the first half of this year, close to double the same period in 2025.

Governor Gavin Newsom opposes the measure on the argument that it will accelerate the exodus, a position that sets him against the tax-the-rich politics of New York mayor Zohran Mamdani as he is widely expected to seek the 2028 Democratic nomination. Chamath Palihapitiya and Bill Ackman have both said the tax would damage entrepreneurship in the state. Larry Page and Sergey Brin have been reported to be weighing their ties to it. Eric Schmidt has attacked the coalition of wealthy opponents publicly.

The spending has not moved the electorate. A University of California, Berkeley survey of 1,220 registered voters conducted with Politico found 50 percent in favour and 28 percent against. Supporters of the state's billionaires marched through San Francisco in February.