Time was when California was known for being run by a single corporation. In the late 19th century, its state legislature was widely regarded as a subsidiary of the Southern Pacific Railroad, which had a fixed price for purchase of assemblymembers and state senators.<\/p>\n
In 1934, media magnates William Randolph Hearst and Harry Chandler joined forces with Louis B. Mayer (the second M in MGM) to wage a campaign of slanderous fictions against Democratic gubernatorial nominee Upton Sinclair, which led to his come-from-ahead defeat at the hands of an obscure Republican.<\/p>\n
More from Harold Meyerson<\/a><\/p>\n Those periods of big-business dominance have been reduced to footnotes today, however, with the wholesale entry of California\u2019s couple hundred billionaires into state politics to fend off the grim prospect of being subjected to progressive taxation. Big money has long played a role in California politics, of course, as the cost of any statewide campaign in a state whose population is roughly the size of Canada is prohibitive. More commonly, though, this happens when a particular corporation or sector feels threatened by a measure directed specifically at them. The most recent tsunami of truly big money came when Uber and Lyft spent more than $200 million<\/a> to overturn a new law that would have compelled them to treat their drivers as employees, subject therefore to minimum-wage laws and kindred horrors.<\/p>\n Today, however, it\u2019s billionaires regardless of industry who feel threatened, in this case by a proposed ballot measure that would levy a one-time tax of 5 percent on their wealth to fund access to hospitals and doctors that many Californians lost and will lose as a result of the cutbacks in President Trump\u2019s One Big Beautiful Bill, which further cut taxes on the rich. There are only about 200 billionaires in California, but at the current rate, every one of them will have had his or her shrieks of pain and outrage featured on local news, social media, and newsprint front pages by the middle of next month.<\/p>\n California\u2019s billionaires feel threatened by a proposed ballot measure that would levy a one-time tax of 5 percent on their wealth.<\/p>\n So far, the media\u2019s focus has centered on those who\u2019ve moved out of state (Sergey Brin) or threatened to (Mark Zuckerberg), or those who\u2019ve vowed to fund opposition campaigns (Peter Thiel) should the wealth tax qualify for November\u2019s ballot. I referenced \u201copposition campaigns\u201d\u2014not \u201can opposition campaign\u201d\u2014because a consulting firm engaged to defeat the wealth tax has reportedly also devised five separate counter-initiatives<\/a>, each of which would invalidate a particular aspect of the tax should state voters approve it. That\u2019s the kind of strategy that limitless funding enables.<\/p>\n To offset the impression that billionaires would have to be greedy bastards to oppose a 5 percent tax on their wealth that would go to health coverage for the lower middle class, some notable billionaires have felt a sudden need to call forth a social conscience. Since mid-January, the abovementioned Brin has helped found and fund<\/a>, to the tune of $20 million, a new organization of the spooked rich, Building a Better California, devoted to cleaning up their image with good deeds. The same consultancy that has drafted those five anti-wealth-tax ballot measures has also used Brin\u2019s and others\u2019 checks to advance a ballot measure that would create a state fund from which Californians could draw for down payment assistance for newly built homes. The abovementioned Mark Zuckerberg last week gave $50 million<\/a> to California State University at Sacramento for its downtown campus. Such gifts are real money by the standards of ordinary humans, though mere chump change when measured against 5 percent of the billionaires\u2019 fortunes.<\/p>\n In the weeks since they\u2019ve come to view themselves as an aggrieved class, California\u2019s billionaires haven\u2019t confined themselves to the politics of ballot measures. Two crypto moguls, Chris Larsen and Tim Draper, have formed yet another new organization<\/a>, Grow California, devoted to opposing the state\u2019s labor unions by spending tens of millions of dollars on the election campaigns of \u201cmoderate\u201d Democrats and the occasional Republican for the state legislature. Larsen, who founded crypto company Ripple, has said he\u2019ll commit $30 million to that effort this year.<\/p>\n Nor is it only legislative campaigns to which Silicon Valley big money will be flocking this year. Last week, San Jose Mayor Matt Mahan announced he\u2019d join the already overpopulated field of Democratic candidates running to succeed the term-limited Gavin Newsom as governor. Mahan bills himself as a law-and-order moderate who\u2019s criticized Newsom for his focus on opposing President Trump. He\u2019s also gone out of his way during his tenure as mayor to oppose most of the policies sought by the city\u2019s unions, including wage hikes and increased parental leave.<\/p>\n More than that, however, Mahan is the first Silicon Valley tech executive to have gone into politics as a candidate rather than a donor. Of late, he\u2019s been a voluble opponent of the proposed wealth tax, leading one Silicon Valley mogul to take to social media<\/a> several weeks ago to ask, \u201cIs Matt running for governor yet?\u201d As mayor, his leading campaign contributors were a cross section of the Valley\u2019s venture capitalists and pooh-bahs.<\/p>\n Mahan\u2019s rhetoric is that of a Third Way Democrat assailing liberal politics. The problem with Democrats, he has said<\/a>, is \u201cwe try to appease every interest group. We try to be responsive to every need.\u201d Apparently, the state\u2019s billionaires don\u2019t constitute an interest group, even as they rush to keep 5 percent of their fortunes from meeting social needs.<\/p>\n Newsom is no less the product of Silicon Valley wealth than Mahan. He\u2019s made a somewhat intellectually defensible argument that a billionaire wealth tax in one state will cause some billionaires to move to other states, even though the number of billionaires who actually did that by January 1\u2014when the time period of their tax liability ended\u2014doesn\u2019t seem to reach double digits. But at a Bloomberg forum in San Francisco last Thursday, Newsom also recounted<\/a> having met personally with what he termed a lot of the state\u2019s billionaires. \u201cI\u2019ve met with people who feel they\u2019re being attacked because of it,\u201d he said. \u201cThere\u2019s just a lot of anxiety out there.\u201d<\/p>\n I don\u2019t doubt that if Newsom also met personally with Californians who\u2019ve lost their Medicaid or ACA health insurance, he\u2019d find at least as much and probably far more anxiety than he\u2019s found among the state\u2019s billionaires. For that matter, I don\u2019t doubt that, were Newsom elected president in 2028 and a nationwide wealth tax began to move through a Democratic Congress, the same billionaires who\u2019ve told him they felt attacked by the California proposal would tell him they feel attacked by a nationwide tax. That would present a good test of whether Newsom\u2019s opposition is based chiefly on the drawbacks of a one-state-only tax, or is susceptible to the indignation of the very rich at higher taxes per se (as we\u2019ve seen among New York City\u2019s wealthy when faced with the prospect of the tax hikes on the very rich proposed by Mayor Zohran Mamdani).<\/p>\n Newsom had trouble enough trying to live down his attendance at a party at that toniest of restaurants, Napa\u2019s French Laundry, amidst the pandemic shutdown he was trying to enforce on his fellow Californians. Positioning himself as the billionaires\u2019 boy in the 2028 presidential field is probably not a winning strategy.<\/p>\n