California’s Democratic Party resolutions committee voted Saturday to recommend endorsing Proposition 40, a one-time 5 percent wealth tax on roughly 200 billionaires in the state, defying both Gov. Gavin Newsom and his party’s gubernatorial nominee Xavier Becerra ahead of a November ballot decision.
The measure, formally known as the California 2026 Billionaire Tax Act, now advances toward potential official party endorsement. A full vote by delegates at Sunday’s general session requires at least 60 percent support, though delegates could also choose by simple majority to take no position or trigger a separate floor debate.
The committee’s decision exposes a significant rift between California’s elected Democratic leadership and its activist base over taxation policy. Newsom has consistently opposed a state-level wealth tax, arguing that California would disadvantage itself economically if it acted alone. “Billionaires can simply move,” the governor has warned, favoring instead a federal version that would prevent such departures.
What Happened
Becerra staked identical ground Friday, the day before the committee vote, when announcing his positions on several November ballot measures. He backed Proposition 3, which would permanently extend an existing high-earner income-tax surcharge for education funding, but pointedly declined to support the billionaire levy. The resolutions committee disregarded both men’s positions.
Proposition 40 would impose a 5 percent levy on the net worth of California’s ultra-wealthy residents. Supporters, led by Dave Regan, president of SEIU United Healthcare Workers West, contend the tax would raise an estimated $100 billion to replace what they claim are roughly $100 billion in federal healthcare cuts under the Trump administration.
The measure has attracted backing from Senator Bernie Sanders, Representative Ro Khanna, AFSCME California, and the Teamsters California. However, the California State Council of Laborers opposes it, as does the California Police Chiefs Association. Notably, SEIU California’s statewide executive board—the broader arm of the same union driving the campaign—voted recently to remain neutral.
The Reaction
Opposition to the tax has intensified as billionaires mobilize resources. Google co-founder Sergey Brin, ranked as the world’s fourth-richest person with an estimated net worth around $267 billion, has contributed more than $100 million to efforts to defeat the measure. His latest donation of $20 million went to Build a Better California, a group actively opposing Proposition 40, which could force him to pay an estimated $13.3 billion in a one-time levy.
The funding reflects broader resistance among California’s tech elite against the state’s escalating tax landscape. Meta founder Mark Zuckerberg recently purchased a $170 million mansion near Miami. Venture capitalist Peter Thiel, former Uber CEO Travis Kalanick, and Google co-founder Larry Page have relocated from California in recent years, citing the state’s progressive policies and tax burdens.
Build a Better California’s campaign aims to give voters an alternative: reject the wealth tax and support measures demanding accountability in how new tax dollars are spent. One such competing ballot initiative would mandate audits of programs funded by new special taxes, potentially complicating implementation of the wealth tax.
What This Means
California already maintains the nation’s highest top marginal income tax rate. The split between Newsom, Becerra, and the Democratic Party’s activist base represents an unusually stark internal conflict in a state where Democrats control every major office and legislative chamber. The sitting governor and his party’s successor candidate now find themselves opposing their own party’s left wing on a central economic question.
The November vote will test whether California voters embrace the wealth tax despite warnings from the state’s political establishment, or reject it in favor of fiscal restraint. The outcome will likely shape Democratic strategy on taxation and spending heading into 2026 and beyond, with implications for how other states approach wealth redistribution policies.
