Silicon Valley built its fortunes betting on disruption. Now, some of the most recognizable names in venture capital and Big Tech are spending millions to disrupt California's plan to tax them.

Campaign finance records show Palantir cofounder Peter Thiel, crypto billionaire Chris Larsen, Google cofounder Sergey Brin, and longtime venture capitalist John Doerr have donated to political action committees opposing Proposition 40, a ballot measure that would levy a one-time tax on billionaires equal to 5% of their wealth if passed. Thiel officially cut ties with California in 2025, ahead of the proposed wealth tax, and Brin has also reduced his official and financial ties to the state.

Who is giving, and how much

Larsen contributed $5 million to Golden State Promise, a committee opposing Proposition 40, and Ripple Labs, the company he cofounded, put in another $5 million.

A separate anti-Proposition 40 committee representing teachers, doctors, and small businesses has received $5 million from Building a Better California, whose top donors are Brin and Doerr. Golden State Promise has also received $450,000 from the California Business Roundtable Issues PAC, one of whose top donors is Thiel — and Thiel has given $3 million to the PAC itself. Checks of this size are a fixture of California's initiative process: app-based companies including Uber, Lyft, DoorDash, and Instacart spent more than $200 million on 2020's Proposition 22, the most expensive initiative campaign in state history at the time. Campaign-finance filings due as the November election approaches will show whether more major donors surface before voters decide.

The stakes for the donors are high. Experts estimate that Proposition 40, if passed, will raise $100 billion for California over five years, with 90% earmarked for health care and the rest for food assistance and education. According to an analysis from Wealth Management, someone whose net worth is $1.1 billion would face a liability of $55 million. If the opposition defeats the ballot measure in November, billionaires will avoid that liability.

A flashpoint for Silicon Valley and Washington

The multimillion-dollar checks are landing as California's proposed wealth tax has turned into a broader fight about whether taxing billionaire wealth would raise needed funds — or push founders and investors to move out of the state. No U.S. state currently taxes overall net worth, and earlier wealth-tax proposals in Sacramento have stalled without becoming law, making Proposition 40 an early test of whether voters will back the idea directly at the ballot box. The relocation question also has a prominent precedent: Elon Musk moved himself to Texas in 2020 and relocated Tesla's headquarters from Palo Alto to Austin in 2021.

Over the weekend, billionaire entrepreneur and investor Mark Cuban publicly sparred over this question with Rep. Ro Khanna (D-Calif.), one of the most prominent defenders of the proposed tax. Cuban argued that Prop. 40 misunderstands that founders can be billionaires on paper while still being cash-poor, and that the measure could drive startup talent out of the state entirely.

"If this passes, only idiot startup founders stay in Cali," Cuban wrote on X.

Khanna pushed back, arguing that truly illiquid "paper billionaires" make up only part of the population the tax would hit. He suggested a workaround in which founders could hand over their shares in the startup to the state in exchange for a loan to pay the tax.

"The government would still collect from the vast majority of billionaires who are not illiquid," Khanna wrote.

The Berkeley analysis

Emmanuel Saez, director of UC Berkeley's James M. and Cathleen D. Stone Center on Wealth and Income Inequality and co-author of an expert report on Prop. 40, argues the tax asks a fair share from the roughly 250 Californians it would cover — billionaires the report says built their fortunes in the state and can absorb a one-time hit, especially if paid gradually.

Saez told Fortune over email that founders without the immediate money to pay the tax can "use a deferral option," paying 5% of "whatever proceeds they take out of their business (as dividends or sales of stock) moving forward."

"If the business fails, they won't have to pay anything," Saez said. "If the business succeeds, they'll have to pay 5% of that success eventually."

A push beyond California

Khanna has also pushed the fight to tax billionaires beyond the state. In March, he and Sen. Bernie Sanders (I-Vt.) introduced federal legislation proposing an annual 5% wealth tax on Americans worth more than $1 billion, with some of the proceeds earmarked for $3,000 payments to lower- and middle-income households. Federal wealth-tax proposals have so far not advanced in Congress: Sen. Elizabeth Warren has repeatedly introduced the Ultra-Millionaire Tax Act, which would impose a 2% annual tax on wealth above $50 million, but no such bill has passed.

This story was originally featured on Fortune.com.