Billionaires spend $425 million fighting a tax on themselves, then collect $4 billion from the same ballot.
On August 25th, advocacy groups funded by Google co-founder Sergey Brin and venture capitalist Peter Thiel opened an advertising campaign against Proposition 40, under the names Building a Better California and Californians Against Wasteful Spending and Higher Taxes. On November 1st, the Hill reported the measure had split California's own Democrats, with experts raising unresolved questions about its economic impact. One day before voters went to the polls, a self-described wealthy Californian wrote in the Guardian that the tax would ease inequality and bolster healthcare without draining the state's coffers or triggering that same exodus. On November 3rd, Californians voted Proposition 40 down.
The final campaign filing closed on November 10th at $425 million spent to defeat Proposition 40, the most expensive opposition campaign in California history, outspending the measure's own backers 250 to 1.
The same day, the New York Post reported that Proposition 38 had officially passed, with more than 54 percent of the vote. Proposition 38 hands $4 billion in state money to two billionaires to run a research institute of their own choosing. Set the two numbers next to each other and the ballot reconciles itself: the billionaires' side spent $425 million of its own money defeating a 5 percent, one-time tax on itself, and collected $4 billion of the public's money on the same ballot, the same day, from the same voters. $425 million moved out of billionaires' accounts to stop a check written against them. $4 billion moved out of the state's accounts on a check written to them. The gap is not a mystery requiring a forensic accountant; it is arithmetic, filed with the Secretary of State on the same afternoon.