Interestingly, the individuals who might shape California’s destiny aren’t necessarily Governor Gavin Newsom or former President Donald Trump. It’s actually the influential union leaders that many find intimidating, who are keen on extracting a whopping $1 trillion from the state.
At the forefront is Dave Regan, president of SEIU-United Healthcare Workers West since 2011, pushing for a 5% tax on the assets of billionaires in California.
This controversial proposal has already put a significant strain on the wealthiest residents, potentially bringing about a $12 billion tax burden that’s prompting some to think seriously about relocating to states with lighter tax loads.
The initiative, which requires 874,641 signatures to make it onto the November ballot, aims to impose a one-time 5% tax on the total assets of around 200 billionaires living in California.
Supporters claim this tax could generate up to $100 billion in revenue over five years. Yet, many predict it could lead to a mass departure of entrepreneurs, who are vital for creating job opportunities and contributing to state revenue.
Regan doesn’t exactly have the warmest reputation. He’s known for his blunt methods in pushing statewide voting measures as a form of political leverage. Even Newsom alluded to his dissatisfaction with Regan’s tactics last year.
Newsom remarked, “There’s someone from a California labor union who hasn’t gathered a single signature yet, and after gathering them, is mulling over a wealth tax that most workers oppose.” He made this comment during a conference hosted by the New York Times last December.
It’s worth noting this isn’t Regan’s first time encountering backlash for promoting divisive initiatives—he’s characterized such actions as a “strategy.”
His union has tackled various contentious issues in the past, like regulating the kidney dialysis industry—a topic that voters have dismissed three times—and a $15 minimum wage initiative that was withdrawn after lawmakers proposed their own solutions.
Regan’s union represents around 120,000 members, primarily in healthcare, and has historically spent around $75 million on 45 different initiatives since 2012, most of which have not gained traction.
The union maintains that the proposed billionaire tax isn’t merely a power play. Instead, it seeks to address cuts to health and education programs made at the federal level during the Trump administration.
SEIU-UHW spokesperson Nathan Selzer highlighted that they have broad voter support and that people will soon get a chance to vote on the measure come November, emphasizing the dire need to close budget gaps.
Selzer pointed out, “There’s no viable solution left to bridge the funding gap created by HR1.” Regan has repeatedly declined requests for interviews.
Longtime political consultant Jim Ross described Regan as an organizer rather than a showy leader. Prior to his time in California, Regan led various SEIU chapters in states like Ohio, West Virginia, and Kentucky.
His presidency at SEIU-UHW followed a contentious takeover that resulted in the dismissal of many staff members and sidelined numerous trustees deemed not loyal to him.
Allegations of misconduct linked to Regan have come back into focus as well, stemming from a lawsuit that accused union officials of fostering a toxic culture, including harassment and a hostile work environment.
The suit, initiated by former union official Mindy Sturge, claimed wide-ranging issues, including alcohol abuse and inappropriate conduct by senior officials. This lawsuit was eventually settled after eight years of litigation.
Despite various criticisms, the union asserts strong backing for the billionaire tax, even amidst pushback from figures like Senator Bernie Sanders.
Selzer maintained that the alliance with labor groups and community supporters is robust, noting an outpouring of endorsements is anticipated once signature collection is finalized.
Critics, however, warn that the tax plan could drive substantial wealth out of California, potentially stripping the state of future tax revenue.
Independent reports have predicted that while tax increases are on the horizon, the financial fallout may lead to millions in ongoing revenue losses annually.
Notable billionaires, including Peter Thiel and Google’s Sergey Brin and Larry Page, are reportedly exploring options to relocate their assets outside California since the tax proposal came to light.
Brin, at risk of facing a $12 billion liability under the tax, has contributed $20 million to a group opposing the initiative.
Thiel, facing an estimated $1 billion in taxes, moved his company’s operations to Miami, a decision speculated to be driven by tax considerations.
Newsom and other centrist Democrats have distanced themselves from the billionaire tax, voicing concerns that it may extend too far. Someone familiar with the situation remarked, “It’s a rogue effort to redirect money toward one specific interest at the expense of broader constituents.”
