A controversial wealth tax won backing from the California Democratic Party on Sunday, the latest episode in the measure roiling the left and its allies.
The party’s executive board voted Sunday to endorse Proposition 40, which, if approved by voters this November, would impose a 5% one-time tax on billionaires’ assets to pay for health care.
The measure has proven divisive. While it has support from progressives including Sen. Bernie Sanders (I-VT) and Rep. Ro Khanna (D-Fremont), others including Gov. Gavin Newsom, gubernatorial candidate Xavier Becerra, and a growing list of labor unions have come out against it, arguing the one-time nature of the tax and billionaire flight could cause more harm than good to California’s state 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, the labor union that gathered enough signatures to put Prop. 40 on the ballot.
Regan cited an internal poll which found more than 80% of registered Democrats support the tax, “and now the Democratic Party of California has officially embraced that strong support through this endorsement.”
Public opinion polls have shown the measure with slim majority support. According to a May poll from the Public Policy Institute of California, 54% of likely voters and 76% of Democrats said they would vote for the tax.
Prop. 40 seeks to raise $100 billion over a five-year span to backfill cuts to Medicaid and food assistance programs included in the One Big Beautiful Bill Act signed by President Donald Trump last year. Its supporters argue that the federal tax cuts benefit the wealthy at the expense of low-income people and that Prop. 40 would reverse the damage.
Its opponents, which include the California Teachers Association and tech founders spending millions to defeat the measure, argue it could destabilize the state budget — which already taxes wealthy earners at higher rates — by pushing billionaires to leave California for other states.
In a statement, the No on Prop. 40 campaign said Newsom, Becerra, and organizations including the California Professional Firefighters union and Planned Parenthood Affiliates of California oppose the tax “because it’s bad for our budget, bad for our economy, and bad for our future. We need smart, durable solutions to our biggest challenges, not unreliable, untested schemes that shortchange healthcare, education, and public safety.”
Democratic executive board members endorsed the measure Sunday during a meeting in San Diego. The party also voted to oppose two competing ballot measures that seek to undercut the billionaire’s tax, along with a voter ID measure and a proposal to weaken the California Environmental Quality Act for housing and infrastructure projects.
Democrats voted to endorse two housing bonds — a $11.25-billion bond to build affordable housing and a $25 billion down payment assistance program — and an $8.4-billion immunology research bond.
The party is also supporting a measure to make permanent an existing tax on high-income earners which funds education and health care.
“Every endorsement we make is earned, not given,” California Democratic Party chair Rusty Hicks said in a statement. “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.”
