Poison-pill effort to cancel proposed billionaire tax hits voters’ mailboxes

California voters are being urged to consider a poison pill initiative that would defeat a controversial tax proposal on the state’s billionaires on the November ballot.

Neither proposal is yet available for a vote; Supporters of each must collect the verified signatures of hundreds of thousands of voters. But texted petitions sent to California voters in recent days show just how risky a contest that draws tens of millions of dollars in campaign spending is.

“Our government has spent billions of dollars of our tax dollars on homelessness and too many failed programs with little to show for it,” the new mailer to voters says. “We can’t afford any more wasteful spending!”

The proposal aims to counter a proposed one-time 5% tax on billionaires’ assets that would fund health care for the state’s neediest residents, but opponents say it would lead to losses in tax revenue as California’s richest flee the state.

Recent mailers and texts sent to voters describe the new proposal as an effort to create a more accountable, transparent and effective state government that would require overseeing new state taxes and ensuring they comply with existing laws.

The fine print description of the proposed initiative included in the mailing states that any new taxes taking effect after Jan. 1 must be deposited into the state’s general fund and comply with existing state tax policy. That’s an oblique reference to an earlier voter-approved ballot measure that required a significant portion of the state’s tax revenue to be spent on education.

The vote includes competing proposals, and if successful, the one with the most votes overrides the other. There are other proposed ballot measures aimed at blocking a 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 $20 million 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 about the efforts Monday night were unsuccessful.

Suzanne Jimenez, chief of staff for SEIU-United Healthcare Workers West, the main 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 these few billionaires are failing,” he said in a statement. “Despite the expensive and wasteful tactics of a small group of billionaires who aim to prevent voters from choosing the billionaire tax in November, our growing coalition and volunteer base is on track to gather signatures and build momentum. The public is clear that keeping emergency rooms and clinics open is more important than billionaires getting more tax cuts.”

California’s budget is notoriously unstable, relying heavily on taxes paid by its wealthiest residents. Income depends on capital gains from investments, bonuses to executives, and windfalls from new stock offerings, all of which are highly unpredictable.

If a majority of voters support it on the November ballot, the billionaire tax would cost more than 200 of the state’s wealthiest residents nearly $100 billion.

The proposed tax would be applied retroactively to billionaires’ assets starting Jan. 1 and has caused some of California’s wealthiest residents to leave the state. This also created a rift among Democrats. Some argue that it is necessary to eliminate tax inequities that benefit the rich and harm everyone else. Supporters include Sen. Bernie Sanders (I-Vt.), who launched his campaign for the billionaire tax proposal in February.

But others, especially Gov. Gavin Newsom, oppose the effort, saying policies that vary by state will drive innovators and businesses out of California.