How California’s Billionaires Are Proving that Billionaire Wealth Endangers Democracy

Friends,

We shouldn’t begrudge billionaires.

As America’s super-wealthy become super-wealthier, their riches don’t come directly at our expense. It’s possible for billionaires to get even richer without the rest of us becoming poorer.

Or to put it a different way, making a fortune in America isn’t a zero-sum game.

But this doesn’t mean billionaires should be allowed to do whatever they want with their billions.

Billionaire wealth becomes a public problem when it finds its way into politics — making it harder for average voters to be heard. It throttles democracy.

Consider the estimated $300 million from more than 70 California billionaires seeking to defeat Proposition 40 — the one-time 5 percent tax on billionaires that’s on Tuesday’s ballot.

It’s being led by Google co-founder Sergey Brin, who single-handedly put $102 million behind the campaign to defeat the measure. (Brin’s personal fortune of $251 billion makes him among the top 4 to 5 richest people in the world.)

Also leading the campaign against the billionaire tax are former Google CEO Eric Schmidt (now worth $64.3 billion, but likely far more after the upcoming IPO of Anthropic, in which he’s a major shareholder); venture capitalist John Doerr ($12 billion); Stripe CEO Patrick Collison ($17.5 billion); and crypto executive Chris Larsen ($13.3 billion).

Brin, Schmidt, Doerr, Collison, and Larsen might be perfectly nice people, for all I know. I don’t mean to impugn their integrity by noting that they’re pouring money into trying to stop California from imposing a one-time 5 percent tax on their wealth.

But in so doing, they’re unwittingly illustrating why billionaire wealth is so bad for democracy.

This is the story of American democracy in this second Gilded Age. Billionaires are building their wealth with bribes campaign donations (as well as with their ownership of media and with their armies of lawyers marching to the Supreme Court to contest judicial rulings that harm their bottom lines).

Billionaires poured money into getting Trump elected in 2016, with his promise of a big federal tax cut if he succeeded, on which he delivered, and poured their money into getting him elected again in 2024, with his promise of another big federal tax cut, on which he delivered again.

Paying for those tax cuts required, among other things, cuts in Medicaid — which in turn prompted California’s move to fill those cuts with a one-time 5 percent tax on billionaire wealth.

Total spending on advertising in the 2026 midterms is $11.3 billion so far — already higher than the total spent on ads (including the presidential race) in 2024. And much of it is from the billionaire class. The 50 largest donors to super PACs have contributed a combined $2.77 billion. Elon Musk himself has sunk $446 million into supporting Republican candidates.

Is it any wonder that billionaires aren’t paying their fair share of taxes? Many pay little or no income taxes because they have little or no income. Instead, they borrow against their vast fortunes to pay for their lavish living expenses. That borrowing isn’t taxed.

California’s Governor Gavin Newsom opposes Prop 40. He has even lent his support to a poison pill (Prop 42) that would prevent the state from ever again trying to tax billionaire wealth.

Newsom claims he’s concerned about billionaires exiting California. Maybe that’s his true motive, but Newsom may have another reason to oppose Prop 40.

As The New York Times reports, Newsom is “preparing a turnkey high-dollar operation” for an upcoming run for the Democratic nomination for the 2028 presidential election. And “as the governor of California, the state with the most billionaires,” Newsom has “certain advantages. Already, two Democratic megadonors, Reed Hastings, the Netflix co-founder, and Chris Larsen, a crypto billionaire, have signaled their leanings toward him. Mr. Newsom has staked out a donor-friendly position opposing California’s proposed billionaire tax and invited donors to V.I.P. receptions on his book tour.”

Interestingly, another California presidential hopeful — Representative Ro Khanna — supports the Prop 40 billionaire tax. Khanna has also sworn off super PAC funding.

Newsom is no more corrupt than the billionaires who are pouring money into opposing Proposition 40, but that’s exactly the point. America’s billionaire class is becoming far richer by the day — they could have paid the entire Prop 40 tax with the additions to their wealth since Labor Day — and although wealth isn’t a zero-sum game, power definitely is a zero-sum game.

The more political power the billionaire class has, the less political power the rest of us have. Hence, the importance of taxing their wealth if we want to preserve our democracy.

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