California voters are being urged to put a poison-pill effort on the November ballot that would nullify a controversial proposed tax on the state’s billionaires.
Neither proposal has yet qualified for the ballot — supporters of each need to gather the verified signatures of hundreds of thousands of voters. But petitions that have been mailed and texted to California voters in recent days demonstrate the stakes in a contest that has drawn tens of millions of dollars in campaign spending.
“Government has wasted billions of our tax dollars on homelessness and many other failed programs with little to show for it,” reads the new mailing to voters. “We can’t afford more wasteful spending!”
The proposal is aimed at countering a proposed one-time 5% tax on billionaires assets that would fund healthcare for the state’s neediest residents, but opponents say it would lead to lost tax revenues as California’s wealthiest flee the state.
Mailers and texts recently sent to voters describe the new proposal as an effort to create a more accountable, transparent and effective state government that would require auditing of new state taxes and ensuring they comply with existing law.
The small-font description of the proposed initiative included in the mailing specifies that any new tax enacted after Jan. 1 must be deposited into the state’s general fund and conform with current state tax policy, which is an oblique reference to a prior voter-approved ballot measure requiring that a significant portion of the state’s tax revenue be spent on education.
If competing proposals appear on a ballot and are successful, the one that receives the most votes nullifies the other. There are other ballot measure proposals aimed at thwarting the billionaires tax.
The mailers and texts were funded by a committee called Californians for a More Transparent and Effective Government, which was funded by another group, called Building a Better California, according to the California secretary of state’s office.
Earlier this year, the latter group received a $20-million donation from Google co-founder Sergey Brin, $2 million from former Google Chief Executive Eric Schmidt and $2 million from Stripe CEO Patrick Collison, among donations from other Silicon Valley leaders, according to fundraising disclosure reports.
Attempts to reach spokespeople connected with the effort were unsuccessful Monday night.
Suzanne Jimenez, chief of staff at SEIU-United Healthcare Workers West, the primary union backing the billionaire tax, decried what she described as an effort by a small number of the state’s wealthiest residents to avoid paying their fair share.
“So far, those few billionaires are failing,” she said in a statement. “Despite the expensive and wasteful tactics by a small group of billionaires that aim to deny voters a choice on the billionaire tax in November, our growing coalition and volunteer base is on track with signature collection and gaining momentum. The public is crystal clear on the fact that keeping ERs and clinics open is more important than billionaires getting more tax breaks.”
California’s budget is notoriously volatile because it is largely dependent on taxes paid by its wealthiest residents. Revenue hinges on capital gains from investments, bonuses to executives and windfalls from new stock offerings, all of which are grossly unpredictable.
The billionaire tax would cost more than 200 of the state’s richest residents about $100 billion if a majority of voters support it on the November ballot.
The proposed tax would retroactively apply to billionaires’ assets as of Jan. 1, and has already prompted some of California’s wealthiest residents to leave the state. It has also created a wedge among Democrats. Some argue that it is necessary to address tax inequities that benefit the rich and harm everyone else. Among the supporters is Sen. Bernie Sanders (I-Vt.), who kicked off the billionaire tax proposal drive in February.
But others, notably Gov. Gavin Newsom, oppose the effort, saying policies that vary by state would drive innovators and businesses outside of California.
