California Democrats voted to endorse Proposition 40 on Sunday, a ballot measure that would impose a one-time 5% wealth tax on the state’s billionaires if passed by voters in November. The endorsement comes as the initiative gains traction ahead of the election, with 90% of projected revenue earmarked for California’s healthcare system and the remaining 10% allocated to public education and food assistance programs.
The measure, spearheaded by the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), targets California’s more than 200 billionaires, many based in Silicon Valley and Hollywood. Supporters argue the tax is an emergency measure to offset healthcare funding cuts linked to President Donald Trump’s One Big Beautiful Bill Act. Polling from the Public Policy Institute of California shows 54% of likely voters and 76% of Democrats support the proposal.
Divisions within the Democratic Party
The endorsement by the California Democratic Party’s executive board highlights deepening rifts over Proposition 40. While progressives such as Sen. Bernie Sanders (I-Vt.) and Rep. Ro Khanna (D-Fremont) have backed the measure, other Democrats, including Gov. Gavin Newsom and gubernatorial candidate Xavier Becerra, have opposed it. Critics warn that the one-time nature of the tax and potential billionaire flight could destabilize California’s state budget.
Labor unions are split on the issue. The SEIU-UHW executive board voted to support the measure, while other unions, including the California State Council of Laborers and United Domestic Workers, have come out against it. The SEIU California executive board took a neutral stance. Dave Regan, president of SEIU-UHW, stated that more than 80% of registered Democrats support the tax, citing an internal poll.
Key Details of Proposition 40
If approved, the tax would apply to billionaires as of January 1, 2026, with the first collection occurring in 2027. The initiative’s backers emphasize its potential to address healthcare funding gaps, while opponents argue it could disincentivize investment and drive wealthy residents out of state. The measure will appear on the November 2024 ballot as Proposition 40.