A tax proposal aimed at billionaires, backed by figures like Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez, is set to appear on California’s ballot next month. However, an unlikely coalition of opposers has arisen to challenge it.
Democratic Governor Gavin Newsom is joining forces with Republicans, influential figures in Hollywood, and tech leaders from Silicon Valley to thwart this tax increase before it gains traction.
The initiative, known as Proposition 40, would impose a one-time 5% surtax on the wealth of billionaires in California, directing most of the revenue toward healthcare. This tax would be implemented starting in 2027 and could be paid in up to five installments.
If the referendum passes on November 3, it might ignite discussions in Congress and could inspire similar measures in other affluent states.
With strong backing from the Service Employees International Union and United Healthcare Workers West, the proposition is also supported by Sanders and Rep. Ro Khanna, who represents Silicon Valley.
Additionally, strategists associated with Sen. Elizabeth Warren have shown interest in this initiative, and one of its most significant individual donors is Saikat Chakrabarti, who previously worked as Ocasio-Cortez’s chief of staff, contributing $201,000. These lawmakers are advocating for broader efforts to tax billionaire wealth.
Robert Dempsey, the political director for Our Revolution, linked to Sanders, described the initiative as a way for states to reclaim their power in the face of congressional inaction, specifically referencing concerns about potential Medicaid cuts in 2025.
A recent Mason-Dixon poll indicated that the proposition currently has support from 48% of voters, compared to 39% who oppose it, leaving 14% undecided. However, the measure has faced a wave of opposition ads, not just from Newsom but also from gubernatorial candidate Xavier Becerra and Republican Steven Hilton.
Becerra has labeled the proposal as “sketchy,” while Hilton criticized it as detrimental to the economy. In a recent Manhattan Institute poll, opposition led by 50% to 35%.
Newsom has expressed concerns that this wealth tax could drive billionaires out of California. He advocates for a national strategy over a state-specific initiative, arguing that it should be up to lawmakers to determine spending priorities.
There are already various bills in Congress targeting the wealthy, with proposals similar to Prop 40 from Sanders and Khanna, as well as additional initiatives proposed by Warren and Rep. Pramila Jayapal aimed at taxing ultra-millionaires.
Groups like Planned Parenthood and the California Teachers Association have also criticized the measure, particularly because it allocates the projected $100 billion to healthcare instead of education.
Billionaire Sergey Brin, cofounder of Google, has invested more than $100 million in opposing the measure through advertising campaigns.
Pollster Brad Coker from Mason-Dixon found it surprising that 19% of Republican respondents supported Prop 40, admitting he struggled to explain that statistic.
One possibility Coker suggested is that the opposition from Hollywood might be provoking some voters to support the tax. He also warned that late-deciding voters often lean against initiatives, which could spell trouble for Proposition 40.
