2026-08-03 · contested story
California Democrats defy Gavin Newsom and Xavier Becerra as they vote to back billionaires tax
On August 2, 2026, the California Democratic Party's executive board narrowly voted to endorse Proposition 40, a one-time 5% tax on roughly 200 California billionaires designed to raise an estimated $100 billion to offset federal healthcare cuts. The endorsement, which required multiple votes to clear the party's 60% threshold (ultimately passing 145-90, roughly 61.7%), placed the party in direct opposition to Gov. Gavin Newsom, Democratic gubernatorial nominee Xavier Becerra, and several powerful labor unions including the California Teachers Association. Rep. Maxine Waters reportedly attended the San Diego meeting to whip votes, adding to earlier backing from Sen. Bernie Sanders and Rep. Ro Khanna, while the measure remained backed by SEIU-United Healthcare Workers West, the union that spearheaded it.
How each side frames it
left
"Billionaires are “treading on very, very thin ice,” Bernie Sanders warned on Wednesday during a fiery speech in Los Angeles, imploring California voters to fight “grotesque” levels of economic inequality"
"This is a moral test about whether the Democratic Party will be for the billionaire class and the donor class or whether we will be for the working class"
"he catalogued Larry Ellison’s jets and Mark Zuckerberg’s yachts and his Palo Alto compound"
"Failing 'Moral Test,' Newsom Rejects Compromise 2% Wealth Tax on California Billionaires"
"wealthy New Yorkers had also warned they would flee if democratic socialist, Zohran Mamdani, was elected mayor of the city. They do not appear to have done so"
center
"California’s proposed billionaire tax will appear before voters in November, teeing up a fight among Democrats over wealth, affordability and the future of their party"
"A nonpartisan analysis for the California legislature notes it is “very hard to predict” and anticipates a loss of hundreds of millions or more in income tax revenue each year"
"Critics question its feasibility and whether the state even knows how to accurately appraise a billionaire’s total wealth"
"A first vote fell just short of the 60% threshold needed for ratification, drawing 59.2% support... The body then reconsidered the original motion to endorse, which passed on the second attempt — 145 votes in favor to 90 against"
"just how far are voters willing to go with eat-the-rich populism? Will policy be ruled by emotion, or is there still room for pragmatism?"
right
"Florida, Texas could lure billionaires if California wealth tax passes"
"It is an impossibly bad idea with obvious negative economic implications: a “one time” extractive tax of 5 percent on every billionaire in the state"
"the confiscation tax"
"The corrupt Democrat machine in California couldn’t resist joining in the march to socialism and extremism. This insane tax scheme has already taken billions of dollars away from essential services"
"It's the height of hypocrisy for Newsom to publicly push a billionaire tax for the rest of the country while opposing one in his own state... So no, Governor, you first."
What each side left out
The left left out — covered by the Detroit News & CalMatters & USA Today
- The Hoover Institution / Stanford estimate that billionaires have already left, potentially raising only ~$40 billion rather than $100 billion
- The administrative difficulty of appraising non-cash assets like art and private businesses
The left left out — covered by the CalMatters & New York Post & Anchorage Daily News
- The $118 million+ raised by opposition PACs and the specifics of the competing ballot measures designed to nullify Prop 40
The right left out — covered by the The San Francisco Standard & Los Angeles Times & Ground News
- The specific healthcare stakes: up to 83 hospitals/clinics could close and 145,000 healthcare jobs could be lost per campaign estimates
- That 54% of likely voters and 76-80% of Democrats support the tax
The right left out — covered by the The Guardian US & Detroit News
- Counter-evidence that wealthy New Yorkers threatened but did not flee after Mamdani's election
- Saez/Berkeley economists' estimate that even if all billionaires left, it would take 25 years for lost revenue to outweigh the windfall
The center left out — covered by the The Guardian US & CalMatters
- The moral/populist framing of the tax as a referendum on oligarchy
- The strongest labor-union internal accusations that the measure was designed to benefit SEIU-UHW members specifically
What's actually true?
[verified] The California Democratic Party's executive board endorsed Proposition 40, a one-time 5% tax on billionaires' assets, on Sunday August 2, 2026.
[verified] The endorsement required multiple votes, with the final passing 145-90 (roughly 61.7%) after an initial vote fell short at 59.2%.
[verified] The tax would apply to roughly 200 California billionaires and aims to raise an estimated $100 billion for healthcare.
[verified] Gov. Gavin Newsom and Democratic gubernatorial nominee Xavier Becerra both oppose Prop 40, arguing it would drive billionaires out of state.
[verified] Newsom proposed a national billionaire tax while opposing the state-level one, arguing 'the fight belongs at the federal level.'
[verified] A May PPIC poll found 54% of likely voters and 76% of Democrats would vote for the tax.
[verified] A PAC opposing the tax, backed largely by Google co-founder Sergey Brin, raised more than $118 million.
[verified] The nonpartisan Legislative Analyst's Office estimates the tax would generate tens of billions initially but cause income tax revenues to decline by hundreds of millions annually thereafter.
The narrative clash
Whether billionaires are actually fleeing California over the tax
Left: wealthy New Yorkers had also warned they would flee if democratic socialist, Zohran Mamdani, was elected mayor of the city. They do not appear to have done so
Right: A Hoover Institution study estimated that nearly 30% of the eligible billionaire tax base has already left California, just on the possibility that the legislation might pass. Six billionaires fled before the Jan. 1 deadline
How much revenue the tax would raise
Left: predicting that it could raise almost $100 billion for the state and saying that even if all of California’s billionaires left, it would take 25 years for the lost tax revenue to outweigh this one-time windfall
Right: Researchers at Stanford’s Hoover Institution estimated about $40 billion. A nonpartisan analysis for the California legislature notes it is “very hard to predict” and anticipates a loss of hundreds of millions or more in income tax revenue each year
Whether the party is 'united' behind the tax
Left: This endorsement puts to rest the idea that California Democrats are not united by the billionaire tax — they are
Right: The endorsement marks one of the clearest public splits within California’s Democratic Party this election cycle, with progressive activists embracing the wealth tax while Newsom, Becerra and other party leaders remain opposed
30 sources analyzed
Los Angeles Times USA Today Politico Common Dreams The Sacramento Bee The Guardian US The Washington Post PBS NewsHour Yahoo! Search The Hill CalMatters Ground News Detroit News The San Francisco Standard NBC Bay Area Bloomberg The Wall Street Journal Anchorage Daily News NBC Los Angeles WCAX 3 New York Post ABC 27 WKOW CNBC The Telegraph - UK The Center Square Newsmax Fox News Charlie Kirk National Review Washington Examiner