Billionaires fund fight against California wealth tax

A billionaire-funded group has donated $5 million to oppose California's Proposition 40, a proposed one-time 5% wealth tax on billionaires, intensifying a costly ballot fight Source: LA Times. The measure, which would raise an estimated $100 billion over five years for healthcare and social programs, has split California Democrats Source: LA Times. Governor Gavin Newsom, gubernatorial candidate Xavier Becerra, and groups like Planned Parenthood oppose it, warning it could drive wealthy residents away and destabilize the state budget Source: LA Times. In contrast, the California Democratic Party, labor unions, and progressives like Bernie Sanders support it Source: LA Times.

The debate

Mark Cuban clashed with Rep. Ro Khanna over the tax, arguing that startup founders are often 'cash poor, stock rich' and would be forced to leave California Source: Fox Business. Cuban threatened to make not being in California a prerequisite for his investments Source: Fox Business. Khanna proposed a nonrecourse loan program allowing founders to pledge stock as collateral, but Cuban dismissed it as 'insane,' arguing it would generate no immediate revenue and could lead to the state owning private companies Source: Fox Business. Khanna countered that the tax would still collect from the 72% of billionaires with liquid assets Source: Fox Business.

Key points

• Building a Better California, funded by Sergey Brin and others, has spent over $127 million on competing measures to weaken the tax Source: LA Times.
• The group also supports Proposition 3, which would extend a tax on high earners, and two housing bonds Source: LA Times.
• Nine Democratic lawmakers announced opposition, warning the measure would 'blow a massive hole in our state budget' Source: LA Times.