Proposition 40 would place a 5 percent tax on the fortunes of California’s roughly 200 billionaires, with most of the resulting revenue earmarked for healthcare programs. Backers call it a long-overdue reckoning for the state’s wealthiest residents. But the measure’s path to passage is anything but straightforward, tangled up in union infighting, competing ballot initiatives and a leadership scandal that has handed opponents a ready-made talking point.

The measure is the brainchild of the Service Employees International Union-United Healthcare Workers West, yet it has drawn opposition from several other major labor organizations — an unusual alignment that puts unions on the same side as the billionaires Prop. 40 targets. Adding to the turmoil, Dave Regan, the union’s outspoken president, is facing serious misconduct allegations from fellow SEIU leaders, who say an independent probe substantiated claims of bullying, harassment, intimidation and even physical violence. Those officials have called for his resignation, saying their union must hold true to its values around respect and accountability. Regan has denied the accusations, but the controversy has become a liability for the campaign as it fights to win over skeptical voters.

Even if Proposition 40 clears the ballot, its future isn’t guaranteed. Wealthy interests opposing the tax have placed two rival measures before voters: Proposition 41, which would bar new taxes that exceed the state’s existing spending cap, and Proposition 42, which would prohibit any tax on personal property. Under California’s rules, if multiple conflicting measures pass, only the one receiving the most votes takes effect. That means a strong showing for either Prop. 41 or Prop. 42 could effectively cancel out the billionaire tax, regardless of how Prop. 40 fares on its own.

A recent survey from the Public Policy Institute of California illustrates just how tight the race has become. Support for Prop. 40 stood at 52 percent among likely voters, with 46 percent opposed — a margin narrow enough that either outcome remains plausible. Meanwhile, both rival measures showed slim leads of their own in the same poll. Notably, those surveyed were given only the official ballot summaries, without any explanation of how the three measures might interact or cancel each other out — a wrinkle that could catch many voters off guard once they’re filling out their ballots.

Mail voting is set to begin within weeks, giving campaigns on all sides a short window to sway an electorate that appears genuinely split.

Absent from the fray, at least publicly, is Gov. Gavin Newsom. Before Prop. 40 even qualified for the ballot, Newsom had voiced concerns that a wealth tax could push high-income residents and businesses out of California, potentially hurting a tax base that already relies heavily on the state’s top earners for income tax revenue. Since then, though, he has softened his stance, suggesting that taxing extreme wealth is better addressed at the federal level rather than through a single state’s ballot measure. Political observers note that Newsom’s shift may reflect his own ambitions beyond Sacramento — a potential presidential run makes alienating the progressive wing of his party over billionaire taxation a risk he seems unwilling to take, even as he stops short of endorsing Prop. 40 outright.

With labor unions divided, competing tax measures on the same ballot, and a scandal complicating the campaign’s messaging, Proposition 40’s fate looks likely to hinge on which side can cut through the noise and reach voters before ballots start arriving in mailboxes.

Original source: CalMatters

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The survey of more than 1,100 likely voters found 52% in favor of the measure and 46% opposed — a margin close enough to fall within the poll’s statistical margin of error. Complicating matters further, the same poll found narrow majority support for two competing measures backed by tech billionaires that would effectively cancel out Prop. 40 if both pass.

Proposition 40 would levy a one-time 5% tax on the wealth of roughly 200 California billionaires, with proceeds intended to help cushion the state’s Medi-Cal program against deep federal funding cuts. The initiative, championed by a healthcare workers union, has created an unusual rift within the labor movement, pitting some unions and progressive groups against each other.

In response, a coalition of wealthy tech industry figures placed two rival measures on the ballot. Proposition 41 would prevent new state tax measures — like Prop. 40 — from bypassing California’s constitutional spending limits, and drew support from 51% of likely voters polled. Proposition 42 goes further, seeking to prohibit any new state taxes on property or personal assets altogether; that measure earned 54% support.

Under California’s constitution, when two conflicting ballot measures both win voter approval, only the one with the higher share of “yes” votes takes effect. That means even if Prop. 40 passes, it could be nullified if Prop. 41 or Prop. 42 receives more support.

Both Gov. Gavin Newsom and the two major candidates hoping to succeed him — Democrat Xavier Becerra and Republican Steve Hilton — have come out against the billionaire tax measure. The poll also showed Becerra maintaining a commanding lead over Hilton in the governor’s race.

Prop. 40 isn’t the only tax-related question facing Inland Empire and Southern California voters this fall. Proposition 3, which would lock in a higher income tax rate for the state’s top earners, drew 58% support in the poll. Meanwhile, Proposition 43 — which would raise the vote threshold required for local governments to approve new taxes — appears to be trailing, with 51% of respondents opposed.

Voters also leaned against a Republican-backed measure that would require government-issued identification at polling places, with 55% opposed, while several bond measures on the ballot drew majority support.

Perhaps the most unified sentiment in the entire poll had nothing to do with any single measure: Nearly 80% of respondents said they believe there are simply too many propositions cluttering this year’s ballot.

Voters looking for more guidance on the November election can consult CalMatters’ voter guide online, and the organization is hosting a series of community discussion events across the state, including sessions this week in San Francisco and San Diego, with a Riverside event planned for later this month focused on election security in the Inland Empire.

In other Sacramento news this week, an oversight report revealed troubling spending patterns at California’s High-Speed Rail Authority, including nearly $40 spent on a luxury rideshare for a trip of less than a mile, gym visits billed as work travel, and repeated flights between Denver and California for vague “executive team” meetings. Investigators flagged more than $685,000 in questionable travel reimbursements paid to outside consultants between 2024 and 2026, including expenses tied to nightclubs, cigar lounges and escape rooms. Assembly Republican leader Alexandra Macedo of Visalia criticized the spending as wasteful.

Separately, state Senate leader Monique Limón of Santa Barbara closed out her first year as Senate president pro tem having kept her Democratic caucus unified on several fronts, including negotiations over liability protections for local governments facing child sexual abuse lawsuits and a wildfire cost-reduction plan that ultimately stalled after Newsom and Assembly Speaker Robert Rivas intervened at the last minute.

And earlier this week, Newsom signed nearly 50 new bills into law, including first-in-the-nation standards for testing and cleaning up smoke damage in homes affected by wildfires — a response to concerns raised after major blazes, including the Eaton Fire that tore through the La Cañada Flintridge area in January.

Original source: CalMatters

The post Poll Shows Californians Divided Over Proposed Tax on Billionaires appeared first on The Hemet & San Jacinto Chronicle.

The most obvious reason is the fight for the House of Representatives. Last year’s redrawing of California’s 52 congressional districts, engineered to favor Democrats, has put as many as five seats in play. Given that Republicans currently hold only a slim majority in the House, what happens in California this fall could tip the balance of power in Washington.

But there’s a second, less obvious layer to this year’s contests. In several reliably Democratic districts, the real fight isn’t between the parties — it’s within them. Progressive candidates are squaring off against more centrist Democrats in races that echo the ideological tug-of-war playing out nationally within the party.

Take the East Bay, where state Sen. Aisha Wahab, a progressive, is competing against Melissa Hernandez, president of the Bay Area Regional Transit board, for the seat once held by Eric Swalwell, who resigned amid sexual misconduct allegations.

In San Francisco, the race to succeed retiring former House Speaker Nancy Pelosi has become its own study in intra-party tension. State Sen. Scott Wiener and City Supervisor Connie Chan both identify as progressives, yet they diverge sharply on housing policy. Wiener has built his career pushing to make it easier to build homes, a position that puts him at odds with much of San Francisco’s left, where resistance to development remains a deeply held value.

Then there’s Proposition 40, a ballot measure that has captured attention well beyond California’s borders. The initiative would impose a 5% tax on the wealth of the state’s roughly 200 billionaires, and its implications reach far past state lines.

On one level, Prop. 40 represents a test case for a taxation model that could eventually spread to other states or even shape national policy debates. It has already drawn commentary from national political figures, including progressive stalwart Bernie Sanders, and coverage in outlets well outside California.

On another level, the measure has exposed real fractures among California Democrats — fractures that mirror the broader ideological split within the national party. Progressive lawmakers view the billionaire tax as a natural extension of long-standing efforts to make the wealthy pay more. But more moderate Democrats, including Gov. Gavin Newsom and his likely successor, Xavier Becerra, worry that such a tax could push high earners out of California altogether, straining an already fragile state budget.

Even labor unions, typically united on tax issues, are split. The measure is backed by SEIU-UHW, a healthcare workers’ union, and would direct most of the resulting revenue toward healthcare programs. But that very focus has drawn opposition from the California Teachers Association and other major unions, which argue the money should be spread more broadly.

Prop. 40 now joins a short list of California ballot measures that have reshaped debates well beyond the state. Proposition 13, passed in 1978, ignited a nationwide tax revolt that reshaped conservative politics for decades. Proposition 187, approved by voters in 1994 before being struck down in the courts, previewed the immigration battles that continue to dominate American politics today. And Proposition 209, passed in 1996, banned affirmative action in public hiring, contracting and college admissions — a policy fight still unresolved in courts and legislatures nationwide.

Should Prop. 40 pass, it could similarly ripple outward, inspiring or discouraging similar wealth-tax proposals elsewhere. But its fate remains far from certain. With mail ballots set to go out in just seven weeks, opponents — many of them among California’s wealthiest residents — have poured significant money into defeating the measure.

The latest survey, conducted by UC Berkeley’s Institute of Governmental Studies, found support at 48%, opposition at 41%, and 11% of voters still undecided. In other words, the outcome remains genuinely up for grabs — and so, potentially, does its influence far beyond California’s borders.

Original source: CalMatters

The post California’s Midterm Vote Could Tip the Balance in National Political Battles appeared first on The Hemet & San Jacinto Chronicle.

The measure, Proposition 40, would impose a one-time 5% tax on California’s roughly 200-plus billionaires, generating an estimated $100 billion. Most of that money would go toward shoring up Medi-Cal, the state’s health program for low-income residents, which faces steep cuts under federal budget legislation signed by President Donald Trump last year.

The proposal has been contentious since a healthcare workers’ union first floated it late last year. It quickly drew fire from some of the state’s wealthiest residents, including Google co-founder Sergey Brin, who has since relocated business holdings outside California and funneled money into efforts to defeat the measure.

Sunday’s vote by the California Democratic Party’s statewide activists and officials didn’t come easily. An initial tally fell just short of the 60% support needed for a formal endorsement, prompting a push from some members for the party to take no position at all. David Atkins, a member of the Democratic National Committee, argued that neutrality would look weak and reinforce voters’ suspicions that Democrats are too cozy with corporate interests and the ultra-wealthy.

After a tense pause, two attendees switched their votes, pushing the measure over the threshold and securing the party’s official backing.

“It was cinematic,” Atkins said of the moment. “It was sort of a movie moment.”

Dave Regan, president of SEIU United Healthcare Workers West — the union that championed the measure — called the vote proof that California Democrats stand behind the tax, despite the visible rift with top party leaders.

That rift is significant. Newsom, who is widely expected to run for president after leaving office this year, opposes Prop. 40, as does Becerra, the frontrunner in the race to replace him. They’re joined by an unusual coalition of Democratic-aligned groups, including Planned Parenthood, doctors’ associations, and several labor unions. The 750,000-member SEIU California opted to stay neutral last week rather than take a side.

Critics argue the tax could push wealthy residents and their money out of California altogether, undermining the income tax revenue the state already relies on heavily, given its progressive tax structure. The nonpartisan Legislative Analyst’s Office has warned the measure could actually shrink state revenue over the long run. Others object that the funding is earmarked almost entirely for healthcare, leaving out other priorities like public schools.

“It’s not stable, it’s only temporary,” said David Goldberg, president of the California Teachers Association, in an interview last month. He noted the measure specifically excludes education funding from receiving any of the proceeds.

The campaign against Prop. 40 has downplayed the significance of the party’s endorsement, noting that California Democrats opposed Proposition 36 — a tough-on-crime measure — in 2024, only to see it pass by a wide margin. The party also backed a minimum wage increase, Proposition 32, that year, which ultimately failed at the ballot box.

“Gov. Newsom, Xavier Becerra, CTA, California Professional Firefighters, Planned Parenthood and others are against Prop. 40 because it’s bad for our budget, bad for our economy, and bad for our future,” the No on 40 campaign said in a statement.

Even so, opponents acknowledge they’re fighting an uphill battle against a broader national mood. Chris Hannan, president of the State Building and Construction Trades Council, spoke against the measure during the party’s weekend meeting but conceded its popularity.

“It’s a popular idea within the party,” Hannan said. “There’s a lot of passion along with the populist message.”

That populist energy isn’t unique to California. Nationally, progressive Democrats have increasingly pushed for taxing extreme wealth as economic inequality widens. Data from the Federal Reserve shows the wealthiest 1% of Americans now control nearly a third of the nation’s household wealth, up from 22% in 1989, while the bottom half’s share has shrunk from 3.5% to 2.5% over the same period. Prop. 40 has drawn attention from national tax-the-rich advocates, including U.S. Rep. Ro Khanna and Sen. Bernie Sanders.

A May survey by the nonpartisan Public Policy Institute of California found that 54% of state residents — and more than three-quarters of Democrats — supported the billionaire tax concept, even before it had officially qualified for the ballot.

Newsom, for his part, has tried to channel that same populist sentiment into federal policy proposals rather than the state measure. He has floated what he calls a “national billionaire’s tax,” which would roll back the 2017 Trump-era tax cuts, establish a minimum tax rate for those earning more than $100 million annually, and close loopholes that let wealthy individuals borrow against unrealized investment gains without paying income tax. He has also spoken about capturing revenue generated by artificial intelligence and redistributing it to workers displaced by the technology.

The No on 40 campaign points to a competing measure, Proposition 3, as a preferable alternative. That initiative would permanently extend the state’s current top income tax rates on high earners, with revenue flowing into the general fund — about 40% of which is constitutionally dedicated to education, a detail that matters greatly to groups like the California Teachers Association.

Still, many within the party argue the moment calls for action rather than caution. Jane Natoli, a member of the party’s resolutions committee, said she understood the concerns raised by opponents but felt the party couldn’t afford to appear indecisive on an issue so central to its base.

“Prop 40 is not perfect. I don’t think anyone will tell you it is,” Natoli said. “Maybe it doesn’t work, but at the same time, it just doesn’t really feel like a moment where we can be sitting on our hands and saying, ‘Eh, let’s go back and work at it another two years.'”

Not everyone agrees. Nancy Tung, chair of the San Francisco Democratic Party, voted against the endorsement, warning that the split among Democratic institutions runs deep.

“This is not a kumbaya measure,” Tung said. “There are very serious disagreements among Democrats and Democratic institutions that are opposed to each other over the measure.”

With Election Day still months away, the debate over Prop. 40 is likely to remain a flashpoint within California’s Democratic Party — and a test of how far the state’s most reliably blue voters are willing to go in taxing its wealthiest residents.

Original source: CalMatters

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Proposition 40 would impose a one-time 5% tax on Californians whose covered assets exceed $1 billion, with the revenue directed toward healthcare and other public programs. Two related measures, Propositions 41 and 42, are also on the ballot and would reshape how such taxes could be structured and reviewed in the future.

Thomas argues that California’s identity has long been built on wagering on what comes next — from the rise of semiconductors and personal computers to breakthroughs in biotechnology, clean energy, quantum computing and artificial intelligence. That culture of innovation, he writes, doesn’t just produce successful companies; it fuels job growth, broadens economic opportunity and generates the tax revenue that supports schools, healthcare and the state’s broader safety net.

That’s precisely why he believes Prop. 40 poses a serious risk. While the need for more healthcare funding is real — especially with Medi-Cal facing new budget gaps and living costs climbing across the state — Thomas contends this particular measure is the wrong tool for the job.

He points to projections from the nonpartisan Legislative Analyst’s Office, which estimates Prop. 40 could generate tens of billions of dollars in revenue in its early years. But that windfall, he warns, would likely be short-lived. The same analysis suggests California could see hundreds of millions of dollars or more in lost income-tax revenue annually going forward, if high-net-worth residents choose to relocate rather than absorb the tax.

That tension, Thomas argues, is the central flaw in the measure: it swaps steady, long-term revenue for a one-time boost. Once that initial money is spent, the state could be left with a permanently smaller tax base to fund essential services in the years that follow.

Beyond dollars and cents, Thomas raises concerns about where entrepreneurs and business leaders choose to build their companies. Founders and executives make decisions about where to grow, hire and invest — and California benefits when those leaders stay rooted here. The state’s continued dominance in tech and innovation, he notes, isn’t guaranteed; other states and countries are actively courting entrepreneurs with their own incentives.

A particular sticking point, according to Thomas, is that Prop. 40 would effectively tax the estimated value of businesses and ideas before they generate any actual profit or are sold. That structure, he says, doesn’t reflect how many innovative companies actually operate. A biotech firm might spend a decade developing a single drug with no guarantee of success. A clean-energy startup could require years of investment before turning any profit. Under Prop. 40, founders in these situations could face enormous tax bills tied to paper value they haven’t yet converted into cash.

Thomas is careful to note that he’s not arguing against taxing the wealthy altogether. He acknowledges that California already taxes wages, business income, dividends and capital gains, and that those who have benefited most from the state’s success should help sustain the institutions that made that success possible.

That’s why he’s urging voters to instead support Propositions 41 and 42. Prop. 42, he explains, would bar the state from creating new taxes based purely on ownership of financial assets, business interests or intellectual property, and would prevent certain taxes from applying retroactively. Importantly, it wouldn’t stop California from taxing income or realized gains — it would simply draw a clearer line between taxing what someone actually earns versus what they merely own on paper, giving business leaders more predictability as they plan where to grow and hire.

Prop. 41, meanwhile, would require greater transparency and auditing around special tax measures, helping voters better understand how new taxes would function and whether the programs they fund are actually delivering results.

Thomas’s ultimate argument is that California doesn’t have to choose between remaining a global innovation leader and maintaining strong public services — the two, he says, are deeply connected. In his view, Prop. 40 offers a short-term fix that risks driving away the companies, jobs and tax revenue California depends on for the future. Props. 41 and 42, by contrast, offer what he calls a steadier path built on accountability and predictability.

Original source: CalMatters

The post Proposed Billionaire Tax Could Boost Short-Term Revenue but Threaten California’s Long-Term Growth appeared first on The Hemet & San Jacinto Chronicle.

Erica Olivo Reynoso, a licensed vocational nurse at Kaiser Permanente’s Los Angeles Medical Center and a member of SEIU-United Healthcare Workers West, said she has watched the toll of rising healthcare costs play out firsthand among her patients — from seniors who skip basic screenings to expectant mothers rushing to use up benefits before they disappear.

“The fear in the halls of our hospital is palpable,” Olivo Reynoso said, describing what she calls the early stages of a healthcare crisis in California.

She points to last year’s federal budget package under President Donald Trump, which cut roughly $100 billion in healthcare funding to the state. According to Olivo Reynoso, those reductions threaten coverage for more than a million Californians and could push insurance premiums to double for millions more. She said hospitals and clinics across the state are already responding with layoffs, service cuts and closures.

Her prescription for the problem is Proposition 40, known widely as the California Billionaire Tax, which would appear on this fall’s ballot. The measure would impose a one-time 5% tax on the wealth of the roughly 200 Californians worth more than $1 billion. Backers estimate it could generate about $100 billion for healthcare, in part to offset federal cuts, along with funding for public schools and food assistance programs.

Olivo Reynoso argues the tax targets a small slice of the population that collectively holds an estimated $2 trillion in assets — much of which, she says, currently escapes taxation because of loopholes benefiting the ultra-wealthy. Without the additional revenue, she warns, patients may struggle to afford medications, emergency rooms in some areas could close permanently, and remaining facilities could face even greater strain from staffing shortages.

“This isn’t about dollars and cents; it’s about life and death,” she said.

Complicating the picture are two competing measures, Propositions 41 and 42, placed on the same ballot by opponents of the billionaire tax. Olivo Reynoso contends both measures are designed specifically to unravel Proposition 40 rather than to accomplish their stated goals involving tax audits or retirement savings.

She noted that funding for the opposing measures includes significant contributions from Google co-founder Sergey Brin, who recently became the world’s third-richest person. Olivo Reynoso argues that spending underscores her point — that a handful of billionaires are working to protect their fortunes at the expense of the state’s healthcare safety net.

Having gathered signatures for the measure across Los Angeles, Olivo Reynoso said she frequently heard from residents anxious about their ability to afford care. Her message to them, and to voters generally, is that the ballot offers a chance to act: support Proposition 40, and reject Propositions 41 and 42.

Business groups and other opponents of Proposition 40 have offered a different perspective, warning that the tax could discourage investment and innovation in California, potentially undermining the very revenue streams that fund the state’s safety net programs.

Original source: CalMatters

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Since the start of the year, he has called for cracking down on corporate investors buying up single-family homes — an idea that has found support from both socialist lawmakers and President Donald Trump. Last month, after failing to keep a billionaire tax measure off California’s November ballot, he pivoted to pitching a national tax on the ultra-wealthy instead. And just last week, speaking before a gathering of Latino policymakers in Los Angeles, he warned that artificial intelligence threatens to upend the American workforce and called for “democratizing” the economy in response.

The shift comes as Newsom, term-limited and widely expected to run for president in 2028, positions himself ahead of what could be a defining national conversation about wealth inequality and AI’s disruption of jobs.

“The old bargain is dead, and AI is going to finish it off,” Newsom told the crowd, referring to the once-common expectation that a working-class job could support a family. “We need to wake up to that foundational reality.”

It’s an unfamiliar role for a governor who has never been known as a populist and who has maintained close ties to wealthy tech donors — many of whom strongly oppose Proposition 40, the state’s billionaire tax measure headed to voters this fall. Throughout his time in Sacramento, Newsom has cultivated an image as a mainstream progressive: supportive of higher taxes on top earners and an expanded safety net, but wary of full-throated redistribution politics. He has resisted most new tax proposals and defended corporate tax breaks that many on the left have wanted eliminated for years.

By zeroing in on AI’s economic fallout, Newsom appears to be staking out a signature issue for a potential presidential run. Whether voters embrace his proposed remedies remains an open question.

“Newsom is balancing two pressures,” said Kevin Liao, a Democratic strategist who worked on billionaire Tom Steyer’s unsuccessful “tax the rich” campaign for governor this year. “There’s a desire to meet the demands of his constituents and the current appetite to be against billionaires, and to address the massive wealth inequality in the state and the country, with the cold political reality that much of his career and presumably his future ambitions have also been built on the financial support of a lot of wealthy folks in Silicon Valley.”

**Multiple tax measures crowd the November ballot**

Back home, Newsom’s vocal opposition to Proposition 40 could create confusion for California voters, who will find several competing tax measures on their November ballots.

Proposition 3, backed by the California Teachers Association, would make permanent the state’s higher income tax rates on the top 2% of earners — money that flows into the general fund, with roughly 40% going toward public schools. Voters first approved those higher rates in 2012 under then-Gov. Jerry Brown and extended them again in 2016. Should they expire as scheduled in 2030, the state could lose between $5 billion and $15 billion annually.

Early polling suggests Prop. 3 has broad support, but CTA President David Goldberg acknowledged that campaigning for it will be complicated with a competing tax measure also on the ballot. The union opposes Proposition 40 in part because its revenue would largely fund healthcare rather than education.

Voters will also weigh in on two additional tax-related measures backed by tech billionaires aimed at undercutting Prop. 40, along with a separate measure from an anti-tax group that would make it harder for cities to raise local taxes.

“It’s always hard when you have a bunch of things” on the ballot, Goldberg said. “It is going to mean that we have to really go out there and make the case for this.”

Asked whether his opposition to the billionaire tax could complicate support for Prop. 3, Newsom told reporters, “I hope that’s not the case. … It’s a legitimate question.”

**A carefully managed image**

For years, Newsom has pushed back against California’s reputation as a high-tax state, often arguing on national platforms — including Fox News — that lower- and middle-income residents actually pay more in taxes in states like Texas and Florida once sales and property taxes are factored in. His argument draws on research from the left-leaning Institute on Taxation and Economic Policy, which found that states without income taxes rely more heavily on regressive taxes that hit lower earners harder.

“He taxes low-income workers more than we tax millionaires and billionaires in the state of California,” Newsom said of Florida Gov. Ron DeSantis during a televised 2023 debate hosted by Sean Hannity.

Critics counter that such comparisons ignore the substantially lower cost of housing and goods in those states.

“California is a high-tax state,” said Jared Walczak, a senior fellow at the right-leaning Tax Foundation. “A state like California can get away with higher rates than some other states because the state has so much to offer. … It doesn’t mean there isn’t a tipping point.”

As his tenure winds down, Newsom continues to point to programs made possible by California’s tax structure — free school meals and subsidized child care among them. At the same time, he frequently urges legislative Democrats not to be “profligate” with spending, and he touts the fact that he has never raised broad-based taxes during his eight years in office, even as critics note he has trimmed corporate deductions and, just this month, signed a law raising taxes on health insurance plans.

When lawmakers have pushed new revenue proposals amid budget shortfalls over the past three years, Newsom has consistently blocked them.

“We have among the highest tax rates in the United States of America for high-wage earners, we have among the highest tax rates … for corporate taxes,” he said in 2024. “I feel strongly that we have to live within our means.”

This year, some Democrats sought to tax corporations whose low-wage employees rely on public healthcare programs; Newsom agreed only to have the state study the idea further.

**A political balancing act**

His stance on the state billionaire tax follows a similar pattern. Alongside allies such as Planned Parenthood, Newsom argues that ultra-wealthy Californians could simply relocate their assets elsewhere — as Google co-founder Sergey Brin and others have already done. Yet early polling shows a narrow majority of Californians favor the measure.

Newsom reportedly pressed SEIU United Healthcare Workers West to abandon the initiative in exchange for concessions. When that effort failed, he shifted his focus toward a federal wealth tax proposal, echoing ideas long championed by progressives such as Sen. Elizabeth Warren.

His federal plan calls for a minimum tax on incomes above $100 million, reversing 2017 corporate tax cuts, raising inheritance taxes, and closing loopholes that allow wealthy individuals to borrow against unrealized capital gains without paying income tax. He has also voiced support — without offering specifics — for a public fund that would use AI-generated wealth to help displaced workers.

Sacramento-based Republican strategist Rob Stutzman said the pivot risks looking inconsistent to voters.

“He’s never banged this drum … he’s a big spender but not a big taxer,” Stutzman said. “This whole jiu-jitsu he has to do to oppose the [billionaire] tax in his state and then support it federally, it doesn’t sound as authentic as others might sound on the soapbox at the Iowa State Fair.”

**AI anxiety cuts across party lines**

Newsom’s populist rhetoric also opens him to attacks from Republicans eager to tie Democratic tax proposals to broader accusations of socialism.

“Most Democrats have the foresight to tie their tax hikes to a far-left policy, but Newsom just wants to take your money because he wants to take your money,” said Nicholas Poche, a spokesperson for the Republican National Committee, accusing the governor of trying to appeal to both progressives and establishment Democrats simultaneously.

Still, strategists note that anxiety over AI’s economic impact resonates across the political spectrum in a way that traditional wealth-tax debates do not.

“A wealth tax is more simplistic and falling along ideological lines,” Liao said. “If we’re talking about broad societal change, it is much more than wealth redistribution. It is something that’s going to touch every single person.”

Surveys show more than half of Americans fear AI could cost someone in their household a job — a worry now spreading even among tech industry workers. Meanwhile, anticipated public offerings from AI giants like OpenAI and Anthropic are expected to further concentrate the nation’s wealth. Currently, the top 10% of Americans hold nearly 70% of the country’s wealth, while the bottom half hold just 2.5%.

Other political figures are wrestling with the same issue. Former Chicago Mayor Rahm Emanuel, a moderate Democrat weighing a presidential bid, has floated stricter AI regulations and openness to basic income support for displaced workers. Sen. Bernie Sanders has proposed a national sovereign wealth fund financed by a 50% tax on AI companies, effectively making the public a stakeholder in the technology’s profits. Even Vice President J.D. Vance has weighed in, telling a podcast host recently that his greatest worry about AI isn’t job losses but the erosion of “social harmony” driven by widening inequality.

“If you make rich people way richer, you are going to have significant problems,” Vance said. “That is one of the consequences that I see from AI.”

He added that Trump is broadly receptive to Sanders’ proposal, even as the president maintains close relationships with numerous tech industry leaders.

Despite Newsom’s newfound rhetoric, some progressives remain cautious. Lorena Gonzalez, head of the California Labor Federation, said she welcomes his attention to AI-driven inequality but wants to see stronger action limiting AI’s use in the workplace and preventing mass layoffs. Newsom has so far resisted calls for aggressive regulation or outright bans on the technology.

Earlier this year, Gonzalez warned Newsom during appearances alongside labor leaders in key presidential primary states that unions may withhold political support unless he takes a firmer stance.

“It’s not enough to say, ‘I feel your pain,’” Gonzalez said. “We don’t think that catastrophic job loss is inevitable.”

Original source: CalMatters

The post Newsom Rejects State Billionaire Tax While Backing Federal Version, Critics Cite Political Calculation appeared first on The Hemet & San Jacinto Chronicle.

The Secretary of State’s office confirmed June 17 that supporters submitted enough valid signatures to qualify the initiative for the ballot. The measure is backed and financed by Service Employees International Union-United Healthcare Workers West, which argues California needs a major new revenue source to prevent hospital, clinic and health care workforce cuts.

Gov. Gavin Newsom, who has repeatedly resisted statewide tax increases, has already come out against the proposal. Some of California’s wealthiest technology and business figures are also funding efforts to defeat or weaken it, warning that the tax could drive billionaires, investment and businesses out of the state.

Newsom is reportedly trying to broker a last-minute agreement that would remove the measure before the November ballot is finalized June 25.

The initiative would apply a one-time 5% tax to California residents whose net worth exceeded $1 billion as of Jan. 1, 2026. Supporters estimate about 200 people would be affected. Those subject to the tax would be allowed to pay it over five years.

Supporters say the measure could raise $100 billion. Under the proposal, the money would be placed in a special fund, with 90% dedicated to health care and 10% set aside for education and food assistance. The Legislature would decide how to spend the money and could allocate as much as $25 billion a year to eligible programs, including Medi-Cal and CalFresh.

The measure would need a simple majority vote to pass.

SEIU-UHW, the state’s largest health care workers union, has put more than $31 million into the campaign. Union leaders say California’s health care system faces a severe funding shortfall after changes to Medicaid included in the federal tax and spending package signed last year by President Donald Trump, known as the “One Big Beautiful Bill Act.”

The law makes broad changes to Medicaid, the public health insurance program for low-income people and people with disabilities. Experts say new work requirements, shorter eligibility periods and limits on federal Medicaid spending are expected to reduce enrollment and cut funding to states. In California, Medicaid is known as Medi-Cal and covers roughly 14 million residents.

The state Department of Health Care Services previously estimated that federal cuts could cost California $30 billion a year. At the same time, state leaders have been dealing with budget deficits and rising program costs. Last year, Newsom and lawmakers limited Medi-Cal enrollment for low-income immigrants without legal status, and additional cuts are being considered as the state adjusts to new federal rules.

Miranda Dietz, director of the Health Care Program at the UC Berkeley Labor Center, has estimated that nearly 3 million Californians could lose health coverage over the next two years because of state and federal changes.

Union officials say the proposed billionaire tax is the only plan large enough to replace the money California stands to lose.

“We are facing literally a collapse of our healthcare system here in California and elsewhere,” SEIU-UHW President Dave Regan said when the campaign was launched in October.

Union spokesperson Renée Saldaña said voters who signed petitions were receptive to the proposal, with some saying they preferred a permanent tax rather than a one-time assessment.

“This is popular. The public is feeling the strain of their own healthcare costs,” she said.

The measure has been endorsed by Vermont Sen. Bernie Sanders and former U.S. Labor Secretary Robert Reich. Several local unions, along with the Teamsters and AFSCME California, have also backed it.

Opponents say the initiative is risky fiscal policy that could damage California’s economy and ultimately reduce revenue if wealthy residents move elsewhere. Newsom has long argued that tax increases on high earners could push both people and companies out of California. During a recent appearance on “Real Time with Bill Maher,” he said the state has “already seen dozens and dozens of people leave.”

The opposition has attracted major financial support from some of the state’s richest residents and former residents. Google co-founder Sergey Brin, whom Forbes estimates is worth about $300 billion, reportedly moved to Nevada because of the proposed tax. Brin has contributed $82 million to Building a Better California, a committee supporting several ballot measures that could undercut the billionaire tax if it passes. The committee itself has not taken a formal position on the tax measure.

Two of those countermeasures are also expected to appear on the November ballot. The Retirement and Personal Savings Protection Act would prohibit new state taxes on personal property, which could effectively invalidate the billionaire tax if both measures are approved. Another proposal, the Improving Transparency, Effectiveness and Efficiency in California Government Act, would require audits of state programs funded by special taxes.

Other wealthy business leaders, including former Google chief executive Eric Schmidt, Kleiner Perkins Chairman John Doerr and The Wonderful Company President Stewart Resnick, have donated millions to Brin’s committee. Ripple Labs co-founder Chris Larsen has launched another political action committee, Golden State Promise, to directly oppose the tax. Venture capitalist Ron Conway is funding a separate group called Stop The Squeeze.

Together, opposition committees had raised $107.9 million as of June 15, according to state campaign finance records.

Robert Lapsley, president of the California Business Roundtable, said opponents are especially concerned about language they believe would allow lawmakers to modify the tax after voters approve it. He said the Legislature could alter the tax rate, change how often it is collected or lower the wealth threshold for who must pay. The union disputes that interpretation.

The proposal has also drawn opposition from groups that might typically align with labor-backed health care funding efforts. Planned Parenthood and the California Teachers Association have opposed the measure, as have major health care organizations including the California Medical Association, the California Primary Care Association and the California Hospital Association.

Even if voters approve the initiative, it is expected to face court challenges. Legal questions could delay the state’s ability to collect or spend the money for years. Critics point to the measure’s retroactive design because it would apply to people who were California residents on Jan. 1, 2026, including those who later moved away. Supporters argue the proposal is legally sound.

Mark Peterson, a public policy professor at UCLA School of Law, said the revenue could significantly help California offset federal health care losses, but only if the measure survives lawsuits and efforts by billionaires to relocate or shield assets.

The debate is already being shaped by concerns over whether wealthy residents will leave. Fortune reported that six billionaires moved out of California last year before the tax could apply to them; their combined wealth could have generated an estimated $27 billion in revenue. Others, including Meta Chief Executive Mark Zuckerberg, reportedly moved after Jan. 1.

Still, there is no evidence that most of California’s roughly 200 billionaires are leaving. Some wealthy Californians, including former gubernatorial candidate Tom Steyer, have said they support the tax.

Early public polling shows the measure has support, but not by a wide margin. A UC Berkeley Citrin Center for Public Opinion Research-POLITICO poll found 50% of voters favor the initiative. At the same time, 54% said they were concerned wealthy residents would leave California, and 63% were concerned they would take businesses with them. A March UC Berkeley Institute of Government Studies-Los Angeles Times poll found 52% support.

Ballot measure campaigns generally prefer to begin with stronger early support because backing often declines as election day nears and opposition advertising increases.

For voters across Southern California and the Inland Empire, the measure is likely to become one of the most closely watched contests on the November ballot, pitting concerns over health care access and Medi-Cal funding against fears that another tax on high earners could weaken California’s economy.

Original source: CalMatters

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The proposal, backed by the Service Employees International Union Healthcare Workers West, would impose a one-time, 5% tax on individuals whose net worth exceeds $1 billion and who were living in the state as of Jan. 1, 2026. The goal is to generate $100 billion in revenue, which would largely be used to offset federal funding cuts to healthcare for low-income people.

“California’s health is at stake,” said Liz Perlman, executive director of a chapter of the American Federation of State, County and Municipal Employees, a major labor union. “Hospitals are closing and people will die. Why? So billionaires can get another tax cut that they don’t need.”

The California Secretary of State still has to verify the signatures and officially place the measure on the ballot. Backers say they collected more than 1.5 million signatures, well over the roughly 875,000 they needed. California allows ballot initiative campaigns to pay people per signature they gather. The cost of gathering petition signatures can vary widely, but it typically runs around $15 for each signature.

If the measure goes before voters in November, it could prompt one of the costliest ballot fights ever and will draw national attention as a litmus test for voter attitudes on raising taxes on the rich. An effort to oppose the tax has already raised millions and led to proposals designed to nullify the tax. Meanwhile, Vermont Sen. Bernie Sanders has campaigned in support of the idea.

Democratic Gov. Gavin Newsom and Silicon Valley tech moguls are adamantly opposed. They warn it will drive California’s wealthiest residents out of the state. Nearly half of California’s personal income tax revenue comes from the top 1% of earners. Some have already purchased properties out of state in case it passes.

“After playing with matches since October the SEIU has succeeded in lighting a ‘Tax the Rich’ wildfire by getting enough signatures,” said David Lesperance, a tax consultant who’s advised some of his wealthy clients who left California because of the proposal. “The many billionaire targets of their efforts have already responded by executing fire escape plans by relocating to other states.”

Brian Brokaw, a longtime Newsom adviser who is leading a political committee opposing the tax, said the measure was poorly constructed and would deal a huge blow to the state’s budget.

“Enacting a so-called wealth tax in just one state wouldn’t target a small group — it would impact all 40 million Californians,” he said in a statement. “This proposal trades a short-term revenue bump for long-term losses.”

At least 25 billionaires listed among Forbes magazine’s 2025 rankings of the world’s 500 wealthiest people either lived in California or had some significant ties to the state, based on a review by The Associated Press. But determining whether they were full-time residents or just frequent visitors could turn into a matter of dispute, since many of them own property elsewhere.

The big tax and spending cuts law President Donald Trump signed last year will cut more than $1 trillion nationwide over a decade from Medicaid and federal food assistance.

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Taxing the rich to backfill Trump-induced federal funding cuts might sound like a no-brainer policy for the party’s left flank, which counts wealth inequality among its top issues. 

But despite a strong show of support from prominent national figures, including Sen. Bernie Sanders of Vermont and liberal economist Robert Reich, the “2026 California Billionaire Tax Act” has become a hot potato for labor leaders.

The proposed initiative would levy a one-time tax of 5% on any resident of California whose net worth exceeds $1 billion, which applies to around 200 people, according to Forbes. That money would plug an estimated $100 billion hole left by federal cuts to Medi-Cal and other social service programs.

Publicly, prominent labor and progressive players have largely kept quiet, unlike Gov. Gavin Newsom who has aired his disdain loud and clear. Yet in private, some union leaders and their allies in the Legislature rail against the measure. Of the critics who spoke with CalMatters for this story — three union leaders and five members of the Legislative Progressive Caucus — only one lawmaker would criticize the measure openly. 

Critics question its feasibility and whether the state even knows how to accurately appraise a billionaire’s total wealth, a crucial step to evaluating how much tax they would owe. They fear long-term revenue loss by driving wealthy people out of California. And some resent that the union sponsoring the initiative, SEIU-United Healthcare Workers West, designed the measure to predominantly benefit its members rather than boost the state’s general fund, where it could go to all budget needs. 

“It’s not that taxing billionaires in itself is wrong,” said Keely Martin Bosler, formerly the top state budget officer to Newsom and former Gov. Jerry Brown. She is now a Democratic consultant who has advised several of California’s most powerful labor groups, including the Service Employees International Union of California, the parent union of SEIU-UHW. “The way in which this tax specifically is constructed is problematic.”

Many progressive state lawmakers and Capitol heavyweights, such as Sen. Scott Wiener of San Francisco and the powerful California Labor Federation, have sidestepped the question of whether they’d support it, declining for now to take a position on an initiative that has yet to officially qualify for the ballot. 

“The Labor Federation won’t take it up for an endorsement until July,” said Lorena Gonzalez, the organization’s president, in a text message.

Yet if the tax lands on the November ballot, as it appears on track to do, progressive critics will be saddled with the tricky optics of opposing — or at least not supporting — a measure that embodies one of their base’s core tenets: taxing the rich.

Even the mere threat the measure could qualify for the ballot has already spurred a torrent of opposition spending — more than $50 million in total so far — from billionaires such as Google co-founder Sergey Brin and cryptocurrency mogul Chris Larsen. Brin’s group, known as “Building a Better California,” has also spawned three new competing ballot measures designed to undermine the billionaires’ tax. 

Critics fear that if billionaires like Brin become even bigger perennial spenders in California politics, they could neuter the progressive agenda by bankrolling more business-friendly candidates and ousting left-leaning, labor-aligned legislators. 

But the measure’s proponents say they are undeterred by the secretive detractors and challenge their critics to put their names behind their words.

“What we have is a group of so-called leaders who are not reflecting the attitudes of their own constituents,” said Dave Regan, president of SEIU-UHW and the de facto leader of the billionaire tax measure. “That’s why they want to be anonymous.”

Regan said he’s confident the initiative will amass enough signatures to qualify for the ballot before the end of April. Then, he said, “We believe a lot of those people are going to come around and change because this makes sense, because the public is supportive, because their own members are supportive.”

The case for, and against, the billionaires’ tax

So far, polling has shown the billionaire tax is relatively popular with voters. Recent surveys show just over half of Californians surveyed said they’re inclined to vote for it. 

Critics point out that California’s existing state tax structure is entirely based on income, rather than net worth. The state would have to appraise each person’s assets, including real estate, art, automobiles and private and public businesses. The billionaires could pay in installments, handing over 1% of their wealth annually for five years.

Bosler said that with income tax filings, the Franchise Tax Board can use data from federal tax returns to verify its own analysis. Since there’s no federal wealth tax, California would be forging uncharted territory with no tax compliance support from any other source or agency — a risky move that could invite legal challenges. 

“The state is not a miracle worker, like, they’re not going to suddenly be able to do all of this like perfectly,” said Bosler. “I mean they will do their best, but I just think this is expertise that they have built up over 50-plus years. Like, none of this is in their wheelhouse at this point.”

But champions of the tax argue it is the only real solution on the table so far to save hospitals, health care jobs and, ultimately, patient lives they say are at risk due to federal funding cuts to Medi-Cal and food assistance programs. 

Supporters note that the tax is not intended to solve California’s structural budget problems. 

“It’s one-time funding to fill what we hope is a one-time hole,” said Brian Galle, a tax law professor at UC Berkeley who helped craft the measure. Galle said only around 200 people would be subjected to the tax, so the extra burden on the Franchise Tax Board wouldn’t be too great. 

“It’s not like FTB is going to get a blizzard of tens of thousands of new returns that they’re going to have to figure out a whole new data system for cracking,” said Galle.

Why some progressives aren’t on board

Those who have qualms with the initiative have largely kept their criticisms private. 

One liberal state legislator, who spoke on the condition of anonymity, said the infighting among the unions puts progressive lawmakers in a difficult position. While he empathizes with the urgency that health care workers feel, he and other Democrats are not convinced the policy could withstand legal challenges and worry about the wealthy employing savvy accounting maneuvers to skirt the tax altogether.

Some organizations that are synonymous with progressive politics in California, such as the Working Families Party, also haven’t taken a position, even as other unions such as the Teamsters and AFSCME California support it. 

Even the powerhouse labor union SEIU California is choosing not to take a position on the measure, which is spearheaded by one of its local affiliates, SEIU-United Healthcare Workers West. 

Assemblymember Chris Ward, a member of the progressive caucus, called the measure a “well-meaning effort by UHW,” but criticized the proposal for being just a one-time tax primarily benefiting the health care sector rather than boosting the state’s overall revenues. Regan said SEIU-UHW made the tax one-time to nullify the argument that it would push billionaires out of the state.

Ward noted that he and his colleagues are considering “superior” bills, such as one that would close a corporate tax loop to generate $3 billion per year, and another that would create a new tax on corporations that pay workers so little that they qualify for Medi-Cal and nutrition assistance.

Regan argued these measures would only make California more unaffordable, since businesses would pass their increased costs along to consumers. 

Ward, the sole state lawmaker who would candidly share his concerns about the initiative with CalMatters, said he and his colleagues have heard pushback from “a number of other labor organizations that don’t support that initiative,” primarily because its members would not directly benefit from any of the revenue. Uniting labor, he said, is the key to any successful revenue solution.

“There’s a need to look at a wealth tax for a more broad range, including health care workers but other purposes that are state priorities,” Ward said, “and that will be left off of the table if this is the only question we’re seeing.”

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