The November measure has triggered anger and opposition among typically Democratic-aligned groups, as well an onslaught from organizations funded by billionaires.
A proposed ballot measure that would impose a one-time wealth tax on the richest Californians is facing an increasingly uphill climb toward passage in November.
The proposal — to tax the assets of the wealthiest Californians once and then spend that revenue almost entirely on healthcare — has split an array of powerful, traditionally left-leaning unions, Democratic lawmakers and other groups usually aligned with Democrats in the state. Meanwhile, it has also triggered an onslaught of opposition and competing ballot measures from groups funded largely by billionaires.
Critics and opponents include the sitting Democratic governor, the current Democratic gubernatorial nominee and the mayors of some of the state’s largest cities. Strategists and political observers in the state say that conflicting messages from within the Democratic coalition pose a huge threat to the measure’s chances of passage.
Even so, deep-blue California has long been seen as fertile ground for the passage of a statewide “billionaire tax,” which will appear on the November ballot as “Proposition 40.”
And a fresh groundswell of support for progressive candidates and policies in deep-blue cities and states, most recently New York and Colorado, has given supporters hope that they can still emerge victorious in November.
They will have to overcome an unusual coalition of labor unions, tech billionaire-founded political groups and Democratic powerbrokers threatening to sink what many on the left have seen as a strong opportunity to put into place a hallmark policy celebrated by progressives.
“While the overall message here of ‘tax billionaires’ is popular, there’s a lot of confusing messages. Prominent Democrats opposing it, key groups opposing it, that you wouldn’t expect to oppose it,” said Ted Lempert, a former Democratic assemblyman in California who teaches political science at the University of California, Berkeley. “And when there’s a lot of confusion around a ballot measure and voters are confused just by the various messages and proponents and opponents, that tends to signal that it’s ultimately going to go down.”
The proposed initiative, which officially made the November ballot last month, would implement a one-time 5% tax on the assets of Californians with net worths exceeding $1.1 billion, while levying a smaller tax on individuals worth between $1 billion and $1.1 billion. The taxes would apply retroactively to anyone living in the state as of Jan. 1, 2026.
Crucially, the measure also requires the state to spend 90% of the new revenue on healthcare, with the remaining 10% split between education and food assistance programs. The measure has been organized entirely by Service Employees International Union-Healthcare Workers West, a massive union that argues the measure is critical to fill in the budget shortfalls California faces due to cuts to Medicaid that were a part of the “big, beautiful bill” President Donald Trump signed into law.
The specifics about how the revenue must be allocated are at the center of growing opposition among many other unions and Democratic groups, which are angry that such a big policy would have so little effect on other areas. Many of them have joined forces with Republican critics who have long argued that a wealth tax could destabilize California’s revenue streams by causing the ultrarich to flee the state.
“The dangerous wealth tax directly threatens vital funding for education and schools, healthcare and clinics, public safety, and infrastructure projects by making California’s revenue even more volatile. That’s why so many leaders — both Democrats and Republicans — are joining us and saying no,” Californians to Protect Funding for Schools, Healthcare and Public Safety, one of broadest coalitions opposed to the measure, said in a statement.
The coalition counts among its members powerful left-leaning groups and unions, including Planned Parenthood Affiliates of California, the California Teachers Association and the California Medical Association, as well as traditionally economically conservative organizations, including state and local chambers of commerce. They’re already up with a handful of digital ads ripping the tax.
A handful of other unions — including the state’s Teamsters and State, County and Municipal Employees unions — also support the tax, while a number of other big labor groups, including the California Federation of Labor Unions, haven’t taken a public position yet.
A Democratic operative in the state who is working with Californians to Protect Funding for Schools, Healthcare and Public Safety declined to say how much the group would spend to oppose the measure. But the person said the effort will “have ample resources ensure that the voters are aware of the stakes and the consequences of this thing passing.”
Meanwhile, political groups funded primarily by tech billionaires have already kicked off spending in the fight against the measure.
Golden State Promise, a super PAC that has received millions from crypto billionaire Chris Larsen, for example, has spent $7.5 million on ads against the proposal since Jan. 1, according to ad-tracking firm AdImpact, with many more similar groups likely to follow suit.
No other groups have yet spent more than $200,000 during that time, according to AdImpact.
Another group, the nonprofit Building a Better California, has received more than $118 million in funding, including millions from Google co-founder Sergey Brin. This group has focused its efforts on placing competing measures on the November ballot — with critics charging that their intent is to confuse voters and mute the impact of the billionaire tax, should it pass. One such measure, which has also qualified for the ballot, would “require audits of programs funded by new state special taxes.”
As much as some billionaires are spending to oppose the billionaire tax, the biggest factor in the election could be the high-profile Democratic detractors, who are giving the party’s rank-and-file voters mixed signals even though they might generally be predisposed toward raising taxes on the wealthy.
The most prominent Democratic critic in the state has been Gov. Gavin Newsom — who failed in his efforts to block the measure from appearing on the ballot. But it’s been former Health and Human Services Secretary Xavier Becerra, the Democratic nominee vying to succeed Newsom as governor, whose messaging has caught the eye of supporters and critics alike.
Becerra has repeatedly said that while he supports taxing the wealthy at a higher rate,he doesn’t support the measure because it risks hurting reliable state revenue levels.
He has called the proposed measure “sketchy policy.” “Every California voter is going to hear that multiple times in the next couple months, and probably go like, ‘Whoa, what’s going on with this proposal?’” Lempert said.
In an interview, Becerra campaign spokesperson Jonathan Underland reinforced the nominee’s position.
“You don’t have to look further than the primary results to see this isn’t politically risky. Voters understand the difference between symbolic wins and real, lasting funding — a one-year tax doesn’t deliver the fair-share outcome most people actually want,” Underwood said. “Clearly, Californians can respect why someone might want a stronger, permanent version of this tax without punishing them for being honest about the limits of a one-year measure.”
Meanwhile, the big healthcare union behind the proposal has maintained that using the tax to address the hole in healthcare funding will be a winning message in November.
“The size of this problem is bigger than anything we’ve ever experienced,” SEIU-UnitedHealthcare Workers West President Dave Regan said in an interview. “If Californiadoesn’t pass this, 3 1/2 million people lose healthcare coverage. Hospitals, clinics, emergency rooms all continue to close.”
Regan said his group and its allies would “spend as we much as we can possibly raise”
while acknowledging that “we’re going to get outspent enormously.” His union spent more than $30 million just on gathering signatures to put the measure on the ballot, and it is certain to spend far more down the homestretch of the campaign.
However, there were signs that the SEIU affiliate sought to avoid a costly and unpredictable campaign this fall. Regan, in negotiations with Newsom that would have ended with the measure not appearing on the ballot, offered a smaller 2% billionaire tax.
Newsom, whose office didn’t respond to questions for this article, rejected the proposal.
Regan, however, said he felt there was a “clear path” to victory this fall. He pointed to some public polling indicating the measure has support and noted that the anger and power of the political left has been consistently underestimated in recent months.
“Everybody was wrong about New York. Everybody was wrong about Colorado,” hesaid, referring to a series of big wins in recent Democratic primaries by outspoken candidates challenging incumbents from the left. “There is unanimity on this problem, and no one’s offered a solution except for the billionaire tax.”