UC Berkeley will inevitably be behind the defeat or victory of Proposition 40.
Student walks past Sather Tower on the main campus of UC Berkeley(Photo by Smith Collection / Gado / Getty Images)
Something of an identity crisis is taking shape in the Bay Area at the University of California system’s flagship university.
The foggy region is being torn in two as programmers and progressives duke it out in a battle over California’s Proposition 40, or “Billionaire Tax,” on the ballot in November. Since its announcement last November, it has spurred a pricey political spar to the tune of tens of millions. On one side of the brawl are academics and students spearheading the effort to pass the progressive measure. On the other are some of the wealthiest names in Big Tech pouring millions into efforts to stop it.
Oddly enough, all parties hail from my university, UC Berkeley. The measure’s chief intellectual architects include Emmanuel Saez, a preeminent scholar on wealth inequality, taxation, and retirement who has taught at UC Berkeley since 2002. He’s joined by Professor Brian Galle of the UC Berkeley School of Law who, along with David Gamage and UC Davis professor Darien Shanske, authored the measure. Together, they form the brain trust behind what Saez describes as “the first time, anywhere in the world, there’s going to be a direct vote on whether people want to increase taxes on the ultrarich.”
But some of Saez’s fiercest opposition comes from another Golden Bear. Among Proposition 40’s most prominent critics is Eric Schmidt, the former Google chief executive and billionaire who spent six years at Berkeley earning his master’s and doctoral degrees. He has teamed up with tech billionaires Larry Page and Sergey Brin to pour a combined $85 million into opposition campaigns.
UC Berkeley will inevitably be behind the defeat or victory of Proposition 40. The irony of Saez—who’s made a career addressing income inequality— and Schmidt—whose fortune is contingent on income inequality—having the same blue and gold logo on their LinkedIn profiles is striking. But to Professor Saez, it’s not confounding nor a coincidence that UC Berkeley’s fingerprint is all over the upcoming election in California. According to the economics professor, the efforts of both parties are natural byproducts of a Berkeley education.
“We praise ourselves for being the best public university not just in the country, but also probably in the world,” Professor Saez said. We spoke in his office on the sixth floor of Evans Hall—the same building Eric Schmidt spent the late 1970s studying in when it housed Berkeley’s Department of Computer Science. “It’s not surprising that some of our alumni succeed in this wonderful ecosystem and become CEOs of huge companies and startup entrepreneurs,” Saez said. “But at the same time,” he continued, “Berkeley has a lot of academic expertise in economics and has been famous for championing more progressive views. And so we also have faculty like myself talking about excessive wealth concentration.”
Professor Saez collaborated with his fellow Berkeley professor Gabriel Zucman on “The Triumph of Injustice,” a 2019 book detailing the demise of progressive taxation in the US. The professors found that billionaires have long been paying lower effective tax rates than middle-class workers.
After stumbling upon a New York Times article about his work, SEIU United Healthcare Workers West (SEIU-UHW) approached Saez with an idea: a wealth tax that could fund state programs such as Medicaid for California. The union had been suffering under Trump’s funding cuts to the healthcare system. “They wanted to find a way to raise revenue in a progressive way,” said Saez. Thus Proposition 40, a measure whose fate for approval or rejection is now in the hands of California’s voters, was born.
Berkeley exists at the heart of Silicon Valley. The region has created more billionaires than perhaps anywhere else on the planet and Saez noted that the tech machine is fed by the academic quality of universities like Berkeley and Stanford. “California, and in particular Silicon Valley,” the economics professor said, “is generating an incredible number of billionaires. Their wealth has grown enormously fueled by the AI boom. Frankly, if you want to become a billionaire, Silicon Valley is the best place to be. ’”
At the same time, Professor Saez noted, “UC Berkeley is the biggest engine of upward mobility among all US universities in the sense that it is the university that takes the biggest number of students from less advantageous backgrounds.” It has also long been a hub of progressive activism. This joining of two worlds is precisely why the students at UC Berkeley have been uniquely positioned to advocate for and against Proposition 40. And students, it turns out, may be one of Proposition 40’s only hopes for becoming law. Berkeley’s Institute of Government Studies found in its most recent poll that voters ages 18-29 are by far the tax’s most supportive demographic. In large measure, the fate of the bill lies with college students.
In May, the Berkeley Political Union student organization and Young America Foundation jointly hosted a debate between Professor Saez and Arthur Laffer, an Economic Policy Advisory Board member under Ronald Reagan who opposes Proposition 40 on the grounds that the measure would undermine investment and job creation. Students—a demographic Professor Saez assessed as “perhaps our strongest base”—brought the respective giants in conversation with each other, and they filled UC Berkeley’s Stone Center on Wealth and Income Inequality for hours to listen to the economists’ jousts on unrealized capital gains and progressive taxation. Here, the hundred-million dollar fight for Proposition 40 boiled down to something every Berkeley student is familiar with: a fiery yet civil debate on campus between two know-it-alls on a Tuesday.
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UC Berkeley’s contradictions mirror those of California itself. The state has long served as an American laboratory for both social and economic change. Its influence extends far beyond its campus — Professor Saez, for one, figured, “If we do it here, the rest of the country and the world eventually will follow.”
The search for the origin and fate of Proposition 40 lands one squarely at UC Berkeley. Two diametrically opposed ideologies have spawned mere meters apart in Evans Hall. Berkeley, like California, has a tendency to create these opposites. Now all that’s left is for them to battle it out at the ballot box. May the best bear win.
Joseph BurneyJoseph Burney is a writer, organizer, and student studying Philosophy and Journalism at the University of California, Berkeley. He founded Berkeley’s Espresso Magazine, and his writing on politics, policy, and society has been featured by The Daily Californian, LAist, Berkeley Life, Berkeley Economic Review, and Berkeley Political Review.