We examine the intricate interplay of incentives, political dynamics, and public policy outcomes that can lead to counterintuitive or inefficient results. Specifically, we examine the case of Proposition 8, a 2018 California ballot initiative that sought to require dialysis clinics to issue refunds if their revenue exceeded treatment costs by more than 115%. Through our analysis, we demonstrate how the concentrated benefits and diffuse costs inherent in this proposal resulted in policies that may not have been optimal for society as a whole.