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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Michael Sainato

The largest union of academic workers, which represents more than 48,000 graduate student workers throughout the University of California system, will hold a strike authorization vote as early as next week in response to how universities have cracked down on students’ Gaza protests.

“The use and sanction of violent force to curtail peaceful protest is an attack on free speech and the right to demand change, and the university must sit down with students, unions, and campus organizations to negotiate, rather than escalate,” stated an announcement of the strike vote from UAW Local 4811. Earlier this year, the union voted by a margin of more than 9 to 1 in favor of supporting a ceasefire, according to the announcement.

The graduate workers last went on strike in November 2022 over a new union contract, which was the largest strike in US higher education history. They recently merged two UAW locals, 2865 and 5810, under the single UAW Local 4811.

“We have been calling on the University of California to de-escalate and negotiate with the protesters over their very urgent and moral concerns and it failed to do that and it failed to protect students and workers and allowed this violence to occur,” Rafael Jaime, co-president of UAW 4811 and a graduate worker at UCLA, told The Guardian. “We’re holding a strike authorization vote to hold the university accountable and demand the university respect the members’ right to protected speech and right to protest.”

He said the union also plans to file unfair labor practice charges against the University of California over the university’s use of LAPD against protesters and for changing policies unilaterally in response to the protests without bargaining.

“This is the defining issue of our generation and its really important for all, not just workers at the University of California but across the entire nation to speak up and to ensure every worker has the right to speak on this issue,” added Jaime. “We believe all workers, all students have a fundamental right to engage in protests and engage in free speech and universities need to respect that right.”

The United Auto Workers, with 400,000 active members and over 500,000 retirees, is the largest US union to call for a ceasefire in Gaza, which they did in December 2023.

UAW President Shawn Fain recently reaffirmed the union’s position. “Our union has been calling for a ceasefire for six months. This war is wrong and this response against students and academic workers, many of them UAW members, is wrong,” Fain said in a statement on 1 May.

Graduate student workers are also calling on the National Labor Relations Board to weigh in on how universities have been responding to Pro-Palestine protests and whether those responses violate US labor laws and collective bargaining agreements with unions on campus.

The Graduate Labor Organization at Brown University has filed several unfair labor practice charges against the university since March 2024 in regards to Pro-Palestine protests and the university’s responses to them.

Forty-one students at Brown University was arrested and charges remain despite the pro-Palestine encampment dispersing as part of negotiations which included a planned vote by the university’s highest governing body for October 2024 on divesting from companies affiliated with Israel. The charges filed by the union allege Brown University unilaterally changed protest policies without bargaining and that made threats of retaliation toward union members for participating in Pro-Palestine campus protests.

“It’s really about the university trying to leverage this fact that as graduate workers we do have student status and kind of using that as a workaround for violating labor law and this has been their playbook on a whole host of issues,” said Michael Ziegler, political director of the Graduate Labor Organization and graduate worker at Brown University. “In the past five years, we’ve had something like 20 protests on the main green and there was never any issue, the university didn’t take these actions. This is new and I think a dangerous attempt by them to clamp down on the rights of speech and protected concerted action.”

UAW Local 872, which represents around 3,000 graduate workers at USC, has recently filed an unfair labor practice charge against the university over arrests of at least five union members. The union has called for charges to be dropped against all 93 protesters who were arrested on 24 April and for the university to concede to demands from USC Divest from Death Coalition.

“USC’s summoning of LAPD riot police to arrest their own students and workers for peacefully demonstrating is abhorrent and wrong,” said Maile McCann, a Local 872 member and PhD Candidate in the Civil Engineering department at USC, in a statement on the charge. “The administration’s actions show an alarming disregard for our right as students and union members to engage in peaceful demonstrations, and their decisions have put international students in particular at serious risk. USC’s unnecessary escalation has resulted in a shameful waste of public resources for the purposes of silencing dissent.”

A spokesperson for USC said in an email, “we believe the charge is without merit and intend to defend our position before the National Labor Relations Board.”

Brown University and the University of California system did not immediately respond to requests for comment.

A spokesperson for Brown University has previously said in response to the first unfair labor practice charge, “individuals are not absolved from abiding by Brown policies by virtue of union membership.” The University of California system has not yet publicly commented on the planned strike vote by graduate student workers.

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A Biden administration task force on organized labor on Monday issued a set of recommendations that could make it easier for federal workers and contractors to unionize.

The report submitted to President Joe Biden included 70 distinct policy proposals, according to a release by the White House. Biden created the task force chaired by Vice President Kamala Harris, with Labor Secretary Marty Walsh as vice chair, through an executive order last April.

“We had the ability for people to come in and give testimony on what they want to see in strengthening workers’ rights,” Walsh said. “This is a very strong, worker-centered document.”

The report argues that a decadeslong drop in union membership has coincided with a rising share of income going to the top 10% of earners. It further says that most Americans have a favorable impression of unions and would join one if given the option in a vote. Yet the Labor Department reported last month that only 10.3% of workers belonged to a union in 2021, down from 20.1% in 1983.

The report has stirred a backlash from many business groups that say union strikes and work stoppages could worsen economic challenges such as the supply chain squeeze and high inflation.

“Today’s report from the White House task force is nothing more than pro-union propaganda and exemplifies how entrenched pro-union allies are in this administration,” said Kristen Swearingen, chair of the Coalition for a Democratic Workplace, which is composed of more than 500 business groups including the U.S. Chamber of Commerce and the American Trucking Association.

Many of the proposals to increase unionization are specific directions focused on the federal government as an employer. The Interior Department is among four agencies that will now let union organizers talk with employees on federal property, a rule that applies to private-sector employees on contract with the government.

The departments of Transportation and Commerce will set preferences and guidelines for federal grants to foster union jobs.

There will be a ban on federal contract dollars going to anti-union activities by the Defense, Health and Human Services and Labor departments as well as the Office of Management and Budget.

Other proposals include efforts to improve workers’ awareness of their rights and to enforce existing labor laws. The task force plans to submit a follow-up report in six months to describe how agencies are implementing the policies and to issue new recommendations.

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