California Gov. Gavin Newsom is facing a difficult stretch as political and personal controversies collide with a growing rebellion inside his own Democratic Party.
Last week, Newsom was forced to respond after a woman publicly discussed an extramarital affair she said she had with the governor nearly two decades ago.
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Newsom and his wife, First Partner Jennifer Siebel Newsom, have also faced renewed scrutiny over his extensive use of “behested payments” as federal investigations involving the couple continue to draw attention.
Now, Newsom is confronting another problem — this time from Democrats openly rejecting his position on one of California’s most consequential ballot measures.
The California Democratic Party’s resolutions committee voted this weekend to recommend endorsing Proposition 40, formally known as the California 2026 Billionaire Tax Act, despite opposition from both Newsom and Democratic gubernatorial nominee Xavier Becerra.
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The proposal would impose a one-time 5% tax on the wealth of roughly 200 billionaires living in California.
The committee’s recommendation moves Proposition 40 closer to receiving the state Democratic Party’s official endorsement ahead of the Nov. 3 election. Final approval requires support from at least 60% of delegates during Sunday’s general session.
Delegates could also vote by a simple majority to remain neutral or move the issue to a separate floor debate.
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Whatever the final decision, the committee vote exposes an increasingly visible divide between California’s Democratic establishment and the party’s progressive activist wing over taxes, spending and the treatment of extreme wealth.
Newsom has consistently opposed imposing a state-level wealth tax, warning that California risks driving wealthy residents, investment and tax revenue to lower-tax states.
His argument is straightforward: billionaires can relocate.
Instead, Newsom has advocated pursuing such policies nationally, where wealthy taxpayers would have fewer opportunities to escape the tax simply by moving across state lines.
Becerra took a similar position Friday, one day before the committee’s vote.
While supporting Proposition 3, which would permanently extend an existing income-tax surcharge on high earners to fund education, Becerra declined to endorse the billionaire tax.
Party activists nevertheless moved forward without the support of either Democrat.
The disagreement is particularly notable in California, where Democrats dominate statewide government and hold overwhelming legislative power. The battle over Proposition 40 is therefore largely an internal Democratic fight rather than a traditional partisan showdown.
The measure’s leading advocate is Dave Regan, president of SEIU United Healthcare Workers West.
Supporters argue that the tax is needed to offset what they describe as approximately $100 billion in federal health care cuts under the Trump administration. Advocates estimate the one-time levy could generate about $100 billion from California’s billionaire population.
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The proposal has attracted support from prominent progressive figures and organizations, including Sen. Bernie Sanders, Rep. Ro Khanna, AFSCME California and the Teamsters California.
But opposition extends beyond Republicans and wealthy taxpayers.
The California State Council of Laborers opposes Proposition 40, as does the California Police Chiefs Association. Even SEIU California’s statewide executive board, part of the broader labor organization associated with the measure’s leading advocate, has chosen to remain neutral.
The fight is unfolding in a state that already has the nation’s highest top marginal individual income-tax rate.
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And some of California’s wealthiest residents are spending heavily to defeat the proposal.
Google co-founder Sergey Brin, whose fortune has been estimated at roughly $267 billion, has reportedly contributed more than $100 million to efforts opposing Proposition 40.
His latest $20 million contribution went to Build a Better California, an organization campaigning against the billionaire tax.
If the proposal passes and Brin remains subject to the tax, a 5% levy on a $267 billion fortune would amount to approximately $13.35 billion, although the actual tax liability would depend on the measure’s valuation rules and other provisions.
Opponents argue the proposal would encourage wealthy Californians to relocate, potentially taking businesses, investments and future tax revenue with them.
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Those concerns have gained attention following several high-profile moves by technology executives and investors.
Meta founder Mark Zuckerberg recently purchased a $170 million property near Miami, while prominent technology figures including Peter Thiel, Travis Kalanick and Google co-founder Larry Page have also shifted significant portions of their lives or business activities away from California.
Supporters of Proposition 40 counter that California’s enormous concentration of wealth means billionaires can afford the one-time assessment and that the resulting revenue could help preserve health care and other government programs.
This article may contain commentary which reflects the author’s opinion.
