California Democratic Gov. Gavin Newsom is having a brutal last few weeks.
Last week, Newsom was forced to respond after a woman came forward and spoke publicly about a prior extramarital affair she had with Newsom nearly two decades ago.
Newsom and his wife are also facing increased scrutiny over his extensive use of “behested payments” as federal investigations involving both the governor and First Partner Jennifer Siebel Newsom continue to attract attention.
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Now, Newsom is scrambling after Democrats just bucked a directive he gave them.
California Democrats exposed a deep internal fracture this weekend when their party’s resolutions committee voted to recommend endorsing a punitive one-time 5 percent tax on the state’s roughly 200 billionaires, openly defying both outgoing Newsom and gubernatorial nominee Xavier Becerra.
The committee’s Saturday decision advances Proposition 40, formally known as the California 2026 Billionaire Tax Act, toward a potential official party endorsement ahead of the November 3 ballot.
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Full approval still requires at least 60 percent of delegates at Sunday’s general session.
Delegates could instead choose, by simple majority, to take no position or to force a separate floor debate.
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Whatever the outcome, the committee’s action lays bare a widening rift between the party’s elected leadership and its activist base over how aggressively Sacramento should target private wealth.
Newsom has consistently rejected a state-level wealth tax, warning that California would hand a competitive advantage to lower-tax states if it acted alone. Billionaires, he argues, can simply move.
He has instead pushed for a federal version that would close the exit door.
Becerra staked out identical territory on Friday, the day before the committee vote, announcing his positions on several November measures.
He backed Proposition 3, which would permanently extend an existing high-earner income-tax surcharge for education funding, but pointedly declined to support the billionaire levy.
The resolutions committee ignored both men.
That puts the party’s rank-and-file activists in direct conflict with the sitting governor and the candidate seeking to succeed him.
In a state where Democrats control every major office and legislative chamber, the split is unusually stark.
Newsom and Becerra are not fighting Republicans; they are fighting their own party’s left wing.
Proposition 40’s chief advocate is Dave Regan, president of SEIU United Healthcare Workers West.
His local has shepherded the measure from qualification through the current endorsement battle.
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Supporters cast the tax as essential to replace what they claim are roughly $100 billion in federal healthcare cuts under the Trump administration.
They project the levy would raise an estimated $100 billion from California’s tiny cohort of billionaires.
Outside endorsements have come from Sen. Bernie Sanders, Rep. Ro Khanna, AFSCME California, and the Teamsters California.
The California State Council of Laborers opposes the measure.
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The California Police Chiefs Association has also come out against it.
Even SEIU California’s statewide executive board—the broader arm of the same union driving the campaign—recently voted to stay neutral.
The influential California Federation of Labor Unions is expected to weigh in later this week, and its decision could prove pivotal.
Proposition 40 would impose a one-time 5 percent assessment on the net worth of about 200 individuals. Backers insist the haul would plug a massive budget hole.
Opponents, including Newsom and Becerra, counter that placing such a concentrated burden on a highly mobile group would encourage those residents—and their capital, jobs, and philanthropic spending—to leave.
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California already maintains the nation’s highest top marginal income-tax rate.
Layering an additional wealth tax on top would test whether the state’s richest residents value remaining in California more than they value retaining 5 percent of their fortunes.
Newsom’s preferred federal alternative would eliminate the relocation incentive by making the tax unavoidable nationwide.
It would also require congressional approval, rendering it largely theoretical in the current political climate.
This article may contain commentary which reflects the author’s opinion.
