California Democrats Can’t Agree On How To Tax Billionaires

California’s Proposition 40, a proposed one-time 5% wealth tax on billionaires, has ignited intense political conflict, pitting labor unions against each other and dividing the Democratic Party. Originally conceived by the SEIU-UHW to backfill Medicaid funding gaps, the measure faces stiff resistance from Governor Gavin Newsom and various trade groups who fear it will trigger capital flight and harm the state’s long-term economic stability. Billionaires have responded with record-breaking campaign spending and counter-propositions designed to permanently ban future wealth taxes. Critics, including prominent progressives like Katie Porter, argue the tax is a flawed, short-term fix that fails to address structural fiscal issues. As the election approaches, the measure’s polling has shifted from majority support to underwater, leaving voters to navigate a complex and contradictory landscape of political messaging.