California Democratic Party backs Proposition 40 billionaire tax

The California Democratic Party’s executive board approved an endorsement of Proposition 40 on Sunday. The measure would impose a one-time 5% tax on the assets of California billionaires to generate roughly $100 billion over five years for Medicaid and food-assistance programs.

Support for the proposal has come from national progressives such as Senator Bernie Sanders and Representative Ro Khanna, while Governor Gavin Newsom, candidate Xavier Becerra and a number of labor unions have voiced concerns that the tax could prompt wealthy residents to leave the state and strain the budget.

"This endorsement puts to rest the idea that California Democrats are not united by the billionaire tax — they are," said Dave Regan, president of SEIU-United Healthcare Workers West, which helped place the initiative on the ballot.

Regan cited an internal poll indicating more than 80% of registered Democrats favor the tax, and a Public Policy Institute of California poll showing 54% of likely voters and 76% of Democrats would support it.

Opponents, including the California Teachers Association and several tech founders, argue the tax could destabilize state finances. The No on Prop. 40 campaign criticized the endorsement, stating the tax is “bad for our budget, bad for our economy, and bad for our future.”

In the same meeting, the party voted against two competing measures that would weaken the billionaire tax, a voter-ID proposal, and a bill to dilute the California Environmental Quality Act. It also endorsed housing bonds totaling $36.25 billion and an $8.4 billion immunology research bond.

"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."