California’s Democratic Party officially endorsed a controversial billionaire wealth tax Sunday, creating a dramatic split with Governor Gavin Newsom and gubernatorial nominee Xavier Becerra just months before the November election.
Party Delegates Override Leadership Opposition
Delegates at the California Democratic Party convention in San Diego voted to support Proposition 40, which would impose a one-time 5 percent tax on approximately 200 California billionaires. The endorsement required two separate votes after the initial attempt fell just short of the required 60 percent supermajority threshold, receiving 59.2 percent support. After delegates rejected a proposal to take no position, they reconsidered and passed the endorsement 145-90, achieving 61.7 percent approval.
The SEIU-United Healthcare Workers West union and its leader Dave Regan have championed the campaign. California Democratic Party Chair Rusty Hicks defended the decision, stating that every endorsement is earned through a deliberative process that prioritizes party values and member input. The contentious floor fight exposed significant divisions within the party over both the proposal and the campaign tactics behind it.
Newsom and Becerra Stand Firm Against Measure
Governor Newsom has consistently opposed a California-only wealth tax, arguing it would disadvantage the state economically because wealthy residents could simply relocate to lower-tax states. The outgoing governor has long advocated for a federal wealth tax instead, which would prevent billionaires from avoiding the levy through relocation. Becerra, the Democratic nominee seeking to replace Newsom, reiterated his opposition Friday while announcing his positions on various statewide ballot measures.
Becerra endorsed Proposition 3 instead, which would permanently extend an existing income tax surcharge on high earners to fund education. The competing positions highlight the awkward split between party leadership and grassroots activists heading into the fall campaign season.
Economic Impact and Political Divisions
Supporters claim Proposition 40 would generate approximately 100 billion dollars, with most funds earmarked to offset federal healthcare funding reductions tied to President Donald Trump’s tax-and-spending legislation. Senator Bernie Sanders, Representative Ro Khanna, Teamsters California, AFSCME California, and California Young Democrats have backed the measure. However, the proposal has divided organized labor and Democratic activists, with opponents questioning whether the campaign built sufficient coalition support before qualifying for the ballot.
Business groups have mounted strong opposition, warning the measure could discourage investment and trigger an exodus of wealthy Californians. The endorsement represents one of the clearest public rifts within California’s Democratic Party this election cycle, with progressive activists embracing the wealth tax while established party leaders remain firmly opposed. Supporters view the vote as evidence that Democratic voters support the proposal despite opposition from prominent elected officials.