Silicon Valley’s Wealthiest Donors Are Funding a Massive Campaign to Defeat California’s Wealth Tax

Fortune dropped the receipts this week, and they read like a who's who of the Silicon Valley donor class writing seven-figure checks to kill Proposition 40 — California's ballot measure that would slap a one-time 5% wealth tax on roughly 250 billionaires. Let me translate the math for you: a founder sitting on $1.1 billion in paper wealth is staring down a $55 million tab, and Sacramento is projecting roughly $100 billion in revenue over five years. That's not a tax. That's an audit with a ballot number.

The Money on the Table

This isn't pocket change, and it isn't hiding either. According to campaign finance records cited by Fortune, crypto billionaire Chris Larsen cut $5 million to Golden State Promise, the main PAC opposing Prop 40, and his company Ripple Labs wrote another $5 million check right behind it. Google cofounder Sergey Brin and longtime venture capitalist John Doerr — through their Building a Better California vehicle — funneled $5 million to a separate committee that conveniently frames itself as the voice of teachers, doctors, and small businesses. Then there's Peter Thiel, who gave $3 million to the California Business Roundtable Issues PAC (which itself kicked $450,000 to Golden State Promise) and who officially cut his ties to California back in 2025, ahead of this very proposal. Brin has quietly been unwinding his official and financial footprint in the state too.

Why the urgency? The state earmarks 90% of the haul for healthcare, with food assistance and education picking up the remainder. For a sector that built its mythology on disruption, watching Sacramento decide to disrupt them back must feel like vertigo.

The Liquidity Question Nobody Wants to Answer

Here's where the friction gets genuinely interesting. Mark Cuban went on X and declared that "If this passes, only idiot startup founders stay in Cali," arguing that billionaires-on-paper are frequently cash-poor and that Prop 40 misunderstands how founder net worth actually behaves. Rep. Ro Khanna — one of the measure's loudest defenders — pushed back, noting truly illiquid paper billionaires are only a slice of the affected population and floated a workaround in which founders hand over their shares to the state in exchange for a loan to cover the tax.

Emmanuel Saez, director of UC Berkeley's Stone Center on Wealth and Income Inequality and co-author of the expert report backing Prop 40, told Fortune the deferral option is clean: founders pay 5% of whatever proceeds they take out as dividends or stock sales going forward. "If the business fails, they won't have to pay anything. If the business succeeds, they'll have to pay 5% of that success eventually," Saez said.

So the real question isn't whether billionaires can absorb the hit. It's whether they'd rather build in California, or build somewhere the exits don't get taxed on the way out. November will tell us who blinks first — and I suspect we already know who's packing.