Google cofounder Sergey Brin has spent over $102 million opposing California’s proposed wealth tax, according to campaign filings. Brin donated to the group Building a Better California, a political action committee (PAC) that opposes the state’s billionaire tax and supports pro-business policies. The total contributions to block the tax have exceeded $187 million, with Brin being the largest contributor. In contrast, support for the tax has garnered about $32 million.
Proposition 40, which will be on the ballot in November, proposes a one-time, 5% tax on California’s 200 billionaires. The revenue from this tax would be allocated with 90% going to the state’s health care program and 10% to education, food assistance, and administration. Brin, whose net worth is nearly $260 billion, could owe approximately $13 billion if the tax is enacted.
California, which has a GDP of $4 trillion, has the highest poverty rate in the country, with 18% of its residents living below the poverty line. The proposed tax has faced opposition from other wealthy individuals, including former Google CEO Eric Schmidt and PayPal cofounder Peter Thiel, who have also contributed to organizations against the measure. Brin has expressed concerns about the tax, comparing it to his experiences growing up in the Soviet Union.
California Governor Gavin Newsom has also opposed the measure, stating that it could harm the state’s tax base and reduce funding for essential services. He argued that the tax would lead to decreased investments in education and public safety.
The opposition to Proposition 40 may lead to billionaires relocating their businesses out of California to states without similar taxes. Brin has reportedly changed his residence to Nevada and purchased a $51 million home near Miami Beach.
There is ongoing debate about the potential impact of the wealth tax on California’s economy. While some billionaires are expected to leave, potentially costing the state about $27 billion in tax revenue, a study by the National Bureau of Economic Research indicated that billionaires in California paid only $4.1 billion in income tax last year, which is a small fraction of their total wealth. The study suggests that even if a significant number of billionaires left the state, it would take decades for the loss in income tax revenue to offset the projected $100 billion that the tax could generate over five years.
The proposed tax is described as relatively small compared to the wealth gains of California billionaires and large compared to the taxes they currently pay.