Prediction markets aren't sure whether California Gov. Gavin Newsom can stop the state's proposed billionaire tax.
Newsom previously vowed to fight California's so-called billionaire tax before it reached the ballot. His efforts are down to the wire, as there is a June 25 deadline to certify whether the proposal will be on the November ballot.
As of Wednesday, June 17, Kalshi and Polymarket showed it was just under a coin flip on whether the tax would make the ballot.
Both prediction markets took a major dive after Bloomberg and Politico separately reported in the last week that Newsom was working to kill the tax. Before the reports, both markets were above 80%. Polymarket traders priced the odds of the initiative making the ballot at near 90%.
The markets are far more skeptical that voters will support the tax. As of Wednesday afternoon, Kalshi traders gave the proposal just over a 19% chance. Polymarket traders pegged it at just an 18% chance.
Both markets only require the tax to pass, which would require a simple majority of Californians to vote in favor of it (provided the proposal actually makes the ballot).
Under the proposal, California residents and certain trusts with net worth of $1 billion or more would face a one-time tax for tax year 2026. The full rate would be 5% for those at or above $1.1 billion, with a phase-in for individuals between $1 billion and $1.1 billion.
The proposal has divided traditional allies of the California Democratic Party, with the SEIU-UHW, a healthcare workers union, pushing the tax. Planned Parenthood affiliates and the California Teachers Association, one of the state's largest teachers unions, are lined up against it.
One of the most controversial aspects of the proposal is that it would apply retroactively to billionaires living in California as of January 1, 2026. Google cofounders Sergey Brin and Larry Page moved assets out of California months before supporters even finished gathering signatures for the proposal.
California is home to more billionaires than any other state, making this one of the biggest wealth tax debates thus far.
Ballot qualification will likely not end the fight. Already, Brin has donated $82 million to "Building a Better California," a political action committee that has backed multiple competing anti-wealth tax ballot measures. Stripe cofounder Patrick Collison donated $7 million to the effort and former Google CEO Eric Schmidt kicked in roughly $3 million more.
All told, "Building a Better California" has brought in a staggering $129 million from just 10 donors. The group's competing initiatives could neuter or greatly limit the proposed billionaire tax. One of their ballot measures includes a retirement-and-personal-savings measure that would prohibit new taxes on ownership or control of personal property and ban retroactive taxes. Under state law, if both initiatives secure a simple majority of votes, the one that receives the most votes would win.
Separately, Ripple Labs and Chris Larsen, its executive chairman and cofounder, each donated $5 million to "Golden State Promise," which was set up to oppose the proposed tax.
Famed Silicon Valley investor Ron Conway donated $100,000 to "Stop the Squeeze," another opposition group. In March, Conway told investor Jack Altman that he's worried the tax could pass if it ever reaches voters, saying it is "our job is to get Gavin to negotiate this."
"We must keep this off the ballot," Conway told Altman during an episode of Altman's "Untapped" podcast. "So a whole bunch of work has to happen for that."
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Brent Griffiths is a senior reporter at Business Insider who covers AI and tech.Previously, he worked at the Washington Post as a researcher on Power Up and the Finance 202. He started his career at Politico where he worked on the web production team and covered breaking news. His passion for covering politics has only grown since he cut his teeth covering the presidential campaign as a student journalist. He's also contributed to the Almanac of American Politics.
