Two of crypto’s deepest pockets are opening a new front in California politics, mobilizing roughly $40 million to kill a proposed wealth tax they claim would drive capital out of the state. Ripple co-founder Chris Larsen and venture capitalist Tim Draper have seeded a new political action committee, Grow California, designed to serve as a “counterforce” to the state’s powerful labor unions.
According to filings reported by The New York Times, Larsen and Draper each contributed $5 million to launch the group last September. The committee has since secured commitments pushing its total war chest to $40 million. Larsen, who remains Executive Chairman at Ripple, has pledged to contribute up to $30 million of his own capital over multiple election cycles.
The Target: Initiative 25-0024
The capital is being deployed primarily to oppose the 2026 Billionaire Tax Act (Initiative 25-0024), a ballot measure championed by the United Healthcare Workers West union. The proposal is aggressive even by California standards:
- The Levy: A one-time 5% tax on net worth exceeding $1 billion.
- The Scope: Applies to worldwide assets, not just California holdings.
- The Kicker: Retroactive to January 1, 2026, meaning billionaires cannot simply move out of state before the November vote to escape liability.
Legal analysts at Baker Botts note that the retroactive clause poses “significant legal and constitutional questions,” a point Grow California is expected to hammer in its ad buys.
Institutional “Counterforce”
Larsen’s involvement signals a shift from defensive crypto lobbying to offensive state-level kingmaking. While federal PACs like Fairshake focus on Congressional seats, Grow California is targeting the state legislature to elect moderate Democrats who can block union-backed fiscal policies.
“The government unions do a great job,” Larsen said. “But that’s going to clash with a lot of the things that are going to make California successful if there’s no counterforce.”
The move comes as Ripple (XRP) continues to navigate a complex regulatory environment. The token struggled to hold momentum this week, slipping 3% to trade around $1.75, though the decline appears uncorrelated with Larsen’s personal political spending.
Market Reality
The “Grow California” initiative is distinct from the $35 million “Building a Better California” committee funded by Google co-founder Sergey Brin, though the two groups share a common enemy in the wealth tax. The convergence of tech and crypto wealth suggests the 2026 cycle will see record spending to prevent what opponents call a “capital flight” event.
