California Democratic Party Pushes Punitive Billionaire Tax Despite Warnings
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In a move that signals the party’s embrace of class warfare, the California Democratic Party’s executive board has endorsed Proposition 40—a one-time 5% tax on billionaire assets—despite strong opposition from Governor Newsom, labor groups, and business leaders who warn it will drive wealth and jobs out of the state.
The California Democratic Party’s executive board voted Sunday to endorse Proposition 40, a radical measure that would slap a one-time 5% tax on the assets of California billionaires. The plan aims to extract roughly $100 billion over five years to fund Medicaid and food-assistance programs, but critics warn it will devastate the state’s economy and drive away job creators.
This divisive proposal has been cheered on by far-left figures like Senator Bernie Sanders and Representative Ro Khanna, while more pragmatic leaders such as Governor Gavin Newsom, candidate Xavier Becerra, and several labor unions have sounded the alarm. They argue that the tax will prompt the wealthy to flee California, shrinking the tax base and putting the state budget at risk.
"This endorsement puts to rest the idea that California Democrats are not united by the billionaire tax — they are," boasted Dave Regan, president of SEIU-United Healthcare Workers West, the union that helped force the initiative onto the ballot.
Regan cited an internal poll claiming more than 80% of registered Democrats support the tax, and a Public Policy Institute of California poll showing 54% of likely voters and 76% of Democrats in favor. But critics argue these numbers ignore the real-world consequences of punishing success and innovation.
Opponents—including the California Teachers Association and tech entrepreneurs—warn the tax could destabilize state finances. The No on Prop. 40 campaign blasted the endorsement, calling the tax “bad for our budget, bad for our economy, and bad for our future.”
At the same meeting, the party rejected two sensible measures that would have softened the blow of the billionaire tax, as well as a voter-ID proposal and a bill to reform the California Environmental Quality Act. The board also endorsed $36.25 billion in housing bonds and an $8.4 billion immunology research bond, further expanding government spending.
"Every endorsement we make is earned, not given," said California Democratic Party Chair Rusty Hicks. "California Democrats take a deliberative approach to our endorsement process that puts our values first and ensures our members have a meaningful voice in shaping the future of our state."