California’s Democratic Party is endorsing a ballot measure that would tax billionaires on their wealth despite opposition – even from within their own party. Hundreds of party members met over the weekend and narrowly voted to back the measure, known as Proposition 40, after previous votes on the matter failed.
“Every endorsement we make is earned, not given,” California’s 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.”
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The Service Employees International Union United Healthcare Workers West, which put forth the proposal, says it’s hoping the tax would raise $100 billion to help offset federal health care funding cuts. Opponents say it could have unintended consequences, like driving billionaires to leave the state, taking their tax dollars with them.
What the proposal would do
The measure would charge California’s some 200 billionaires a one-time five percent tax on their net worth. The tax would apply to people who resided in California as of Jan. 1, 2026, and with a net worth of $1 billion or more at the end of the year. When calculating a person’s net worth, it would exclude certain assets, like some real estate.
While many sources maintain the state’s billionaires remain near 200, several of the state’s wealthiest residents took steps to relocate to other states before 2026. Whether their billions would be subject to the one-time tax could end up in courtrooms.
Now, voters in the state will decide whether to levy the tax come November.
A divisive proposition
The Billionaire Tax Act has been divisive among Democrats, with California Gov. Gavin Newsom and Democratic gubernatorial candidate Xavier Becerra both speaking out publicly against it. The measure also didn’t get much Congressional backing — Rep. Ro Khanna was the only high-ranking member from California to speak out in support of the proposition.
Rep. Maxine Waters attended the meeting in San Diego over the weekend, where she encouraged key yes votes to get Proposition 40 over the finish line with at least 60% of the vote, according to Politico. One attendee told the outlet that Waters’ support seemed to energize party activists, with some even chanting her name as they voted.
“This endorsement puts to rest the idea that California democrats are not united by the billionaire tax — they are,” Dave Regan, president of SEIU-UHW, said in a statement. “Polling shows that more than 80% of registered Democrats support this critical solution to our healthcare crisis and now the Democratic party of California has officially embraced that strong support through this endorsement.”
Prop 40 has also divided labor unions. The California Teachers Association opposes it, in part, because it complicated efforts to extend an income tax on the wealthy that funds schools. That measure will also be on November’s ballot.
There’s even a “No on Prop 40” campaign that’s backed by the California Medical Association and California Primary Care Association Advocates.
“Governor Newsom, Democratic Candidate for Governor Xavier Becerra, the California Teachers Association, California Professional Firefighters, Planned Parenthood Affiliates of California, and so many others are standing together against Prop. 40 because it’s bad for our budget, bad for our economy, and bad for our future,” a spokesperson for the No on Prop 40 campaign said in a statement after the vote. “We need smart, durable solutions to our biggest challenges, not unreliable, untested schemes that shortchange healthcare, education, and public safety.”
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