New report debunks ‘billionaire exodus’ claims as California attracts record-breaking investment

SACRAMENTO, Calif. — New data showing California attracted more than $335 billion in venture capital investment this year has definitively exposed the billionaire-backed campaign against Proposition 40, the California Billionaire Tax, for what it is: a dishonest effort to scare voters into believing a tax on billionaires will cause economic decline. In fact, Prop 40 is the way to protect the state’s innovation economy from crisis.

The new figures, reported by the Los Angeles Times using PitchBook data, underscore California’s continued dominance as the global center of innovation, entrepreneurship, and investment, even as opponents of Prop 40 have argued that asking the state’s wealthiest billionaires to pay their fair share would trigger a mass economic exodus.

“Despite lies from the billionaires and their allies, the evidence is overwhelming: the idea that a billionaire tax is scaring away wealth is a complete myth,” said Debru Carthan, Vice President of SEIU-United Healthcare Workers West, one of the lead sponsors of Proposition 40. “Prop 40 simply asks those who have benefited the most from California’s economy to pay their fair share and protect the healthcare system that millions of Californians rely on.

Don’t be fooled by the billionaire’s lies into thinking otherwise.”

The findings come as billionaire-backed opponents continue to argue that Prop 40 would drive investment out of California. Instead, the latest economic data shows that the state’s unmatched workforce, research institutions, entrepreneurial ecosystem, and access to capital continue to make California the nation’s engine of innovation.

The real threat comes from what would happen to California’s economy if voters do not pass Prop 40, including hundreds of thousands of job losses across the state, hospital and ER closures, and skyrocketing health insurance premiums.

According to the report:

• California attracted more than $335 billion in venture capital investment this year.
• The state raised ten times more venture capital than New York, its closest competitor. California also raised forty times more investment than Texas.
• California’s economy reached $4.25 trillion, making it one of the largest economies in the world.
• California is home to nearly 400 billion-dollar startup companies, more than any other state.
• The Los Angeles area alone attracted nearly $8 billion across more than 200 venture capital deals, driven by continued investment in aerospace, defense, artificial intelligence, software, and advanced manufacturing.

In November, California voters will at last have a chance to make billionaires pay their fair share to help prevent that through Prop 40, a commonsense ballot initiative that places a one-time 5% tax on the wealth of approximately 200 billionaires who reside in the Golden State. Ninety percent of that funding will go to offset Medi-Cal cuts in order to prevent ER and other service closures, and 10% will go toward funding food assistance and public education.

Impact of federal healthcare cuts

• Dozens of hospitals and ERs will close; dozens more will be forced to cut back services and lay off healthcare workers. The patient care crisis will worsen as patients are forced to wait longer and drive further for medical care.
• Up to 3.4 million Californians could lose their healthcare coverage under Medicaid, including many seniors, children, veterans, and people with disabilities
• The state could lose about $20 billion in federal healthcare funding every year — destabilizing the health care system and driving up health care costs for everyone.
• Insurance premiums for Californians who purchase Affordable Care Act plans could rise as much as 97%, and an estimated 400,000 Californians could be priced out of healthcare altogether.

Impact of food assistance cuts

• Currently, 5.5 million Californians benefit from food aid. 3.5 million are senior citizens and children.
• At least 754,000 people could lose their entire monthly benefit, with over 3 million households facing reductions.
• The estimated funding loss is $2.5 to $4.5 billion annually.
• The SNAP/Cal-Fresh cuts, if not backfilled by other funding mechanisms, are expected to cost California approximately 400,000 jobs over the next nine years.

About Prop 40, the California Billionaire Tax Act

The Prop 40 California Billionaire Tax Act proposes a one-time emergency tax on the wealth of the state’s ultra-high-net-worth billionaires to safeguard Medi-Cal, keep hospitals and emergency rooms open, expand food assistance, and support public education. The initiative is a direct response to federal healthcare cuts under HR1 that threaten healthcare access and economic stability for millions of Californians.