The Billionaire Tax Could Be Defeated by 2 Other Tax Measures — Here’s How

Por Kristen Hwang — Truthout

A billionaire-backed group aims to undermine California’s wealth tax and create multiple ways to defeat it.

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California voters will soon decide whether to tax billionaires — but even if a majority says yes, the measure could still lose to either of two billionaire-funded measures designed to cancel it out.

The billionaire-backed group Building a Better California designed two countermeasures to undermine the wealth tax and create multiple ways to defeat it.

Recent polling shows slim majorities of likely voters support not just the wealth tax, Proposition 40, but also Propositions 41 and 42, the measures aimed at killing it, according to the Public Policy Institute of California.

“I don’t think that people at this point realize they’re direct countermeasures because there hasn’t been much said about 41 and 42,” said Mark Baldassare, polling director for PPIC.

Only one outcome can prevail. If Prop. 40 captures more votes than both 41 and 42, the wealth tax takes effect, voiding the countermeasures. If either 41 or 42 outpolls Prop. 40, the billionaire tax does not take effect.

Prop. 40 would levy a one-time 5% tax on California residents whose net worth exceeds $1 billion. The tax would apply based on residency as of Jan. 1, 2026 — a date that had passed when the measure qualified for the ballot — meaning billionaires who left the state afterward would still owe it.

Most of the money generated would fund healthcare, while a smaller portion would go to education. Service Employees International Union-United Healthcare Workers West, the primary proponent and financial backer of the measure, says the tax would raise about $100 billion and is needed to backfill federal healthcare cuts passed last year. Conservatives argue California’s Medi-Cal program has grown too expensive, and new federal policies will help the state cut back.

Prop. 41’s real target is Prop. 40: It would require new tax proposals passed after the start of this year to follow the state’s annual spending limit — a cap passed by voters in 1979 during a period of strong anti-tax sentiment that recent voter-approved special taxes have exempted themselves from. The billionaire tax would automatically violate this provision because it isn’t written to comply with the state spending limit.

Prop 41 would also require the nonpartisan state auditor to review new tax proposals before they reach voters and identify potential spending cuts in the programs they’d fund. If voters approve a tax, some of the revenue generated would pay for the audit; if a proposal fails, the state would be on the hook for the additional cost.

Prop. 42 would bar new taxes on personal property such as businesses, investments, retirement accounts, trusts and art collections — the exact things that Prop. 40 targets. It would also prohibit retroactive taxes, which would block a key part of Prop. 40: taxing wealth accumulated before the measure takes effect. Either provision alone is enough to nullify Prop. 40, if the wealth tax wins fewer votes than 41 or 42.

“Prop. 42 is a more direct anti-wealth tax proposal,” said Megan Jones, a tax attorney with Holland and Knight. The Legislature has tried unsuccessfully in the past to pass multiple wealth taxes, Jones said. If Prop. 42 passes, she said, it could limit lawmakers’ ability to try again in the future.

Backers of the billionaire tax — primarily SEIU-UHW — have raised about $31 million to pass the measure, mostly from union coffers. The California Democratic Party also supports the measure.

Gov. Gavin Newsom, along with doctors’ groups and clinics, opposes Prop. 40. Newsom argues the tax would not create a long-term solution to California’s budget woes and will drive wealthy people and businesses the state relies on through income taxes out of the state, further reducing revenue.

Sergey Brin, the Google co-founder, and other billionaires are bankrolling the opposition campaign, ploughing more than $56 million into the No on Prop. 40 committee through a political organization called Building a Better California. That same group is the primary financial backer for both Propositions 41 and 42, raising $131 million to campaign for those measures. In total, the billionaire-backed group has gathered more than $187 million to try to defeat Prop. 40.

Baldassare said the billionaire tax’s backers will have a difficult time overcoming voter confusion about the three competing measures.

Supported by the California Health Care Foundation (CHCF), which works to ensure that people have access to the care they need, when they need it, at a price they can afford. Visit www.chcf.org to learn more.

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Kristen Hwang is a health reporter for CalMatters covering health care access, abortion and reproductive health, workforce issues, drug costs and emerging public health matters. Her series on soaring rates of maternal and congenital syphilis won a first place award from the Association of Health Care Journalists. Her recent work has also been recognized by the Sacramento Press Club and Asian American Journalism Association.

Prior to joining CalMatters, Kristen earned a master’s degree in journalism from UC Berkeley’s Graduate School of Journalism and a master of public health degree from Berkeley’s School of Public Health. Her graduate student research focused on water quality in the Central Valley and uncovered chemicals related to fracking in drinking water wells. During the pandemic, she joined a team of graduate student journalists contributing to The New York Times COVID-19 data tracker and West Coast coverage. While at Berkeley, Kristen also directed and produced When They’re Gone, a short documentary on migratory beekeepers and sustainable agriculture. When They’re Gone won the 2021 Student Academy Award and has screened at festivals around the world.

Kristen is based in the Sacramento area. She has worked as a reporter in Washington, D.C., Arizona, Alabama and California. She cut her teeth as a beat reporter at The Desert Sun in Palm Springs covering education and criminal justice. There she also worked with a team to investigate the impact of Proposition 47, a California criminal justice sentencing reform ballot measure. Kristen directed a documentary for the Prop. 47 project that won an Edward R. Murrow Award from the Radio Television Digital News Association.

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Fonte: Truthout