Silicon Valley Billionaires Defeat a Tax Battle, but the Wealth Fight Is Just Beginning

Fortunes Built From Company Shares

More than 200 billionaires live in California, with combined wealth estimated at $2.3 trillion. UC Berkeley economist Gabriel Zucman says that amount is roughly equal to the annual income of all the state’s residents.

Technology fortunes often come from company equity rather than salaries. Shares generally are not taxed until sold, and Mark Zuckerberg, Larry Ellison and Larry Page are among billionaires known for taking $1 salaries.

A Costly Campaign Against Prop 40

A coalition opposing the billionaire tax included prominent technology figures such as Sergey Brin, Patrick Collison, Eric Schmidt and John Doerr. The opposition spent more than $300 million, including a reported $148 million advertising campaign, while supporters spent about $2 million on ads. Political strategist Cooper Teboe said the spending imbalance created a “genuine marketing gap.” Investor Tom Steyer, a billionaire who supported the measure, argued that the current system lets people build huge fortunes without paying tax.

The Debate Moves Beyond California

Some advocates have turned their attention to a national wealth tax. Governor Gavin Newsom and other opponents of the state proposal said they would prefer wealth to be taxed federally, while some critics of the measure’s details support wealth taxes in principle.

Steyer also backs a federal tax on billionaires. He said disagreement over whether Prop 40 was the right approach should not be treated as proof that taxing wealth is impossible.

Texas Offers A Political Contrast

Those campaigns emphasized class interests over the traditional left-right divide. The result has encouraged some wealth-tax proponents to look for a broader political coalition.