California billionaire tax splits Democrats as Governor Newsom discloses income

California's Democratic Party voted Sunday to endorse Proposition 40, a November ballot measure that would impose a one-time 5% tax on the roughly 200 residents of the state classified as billionaires, breaking with Governor Gavin Newsom and several major labor unions that oppose it.

The party's executive board backed the measure only after an earlier attempt to remain neutral, and a prior vote to endorse it outright, both failed to gain traction – a split that financial advisors serving high-net-worth California clients will want to track closely as the measure heads toward voters.

As reported by Politico, proponents initially fell just short of the 60% threshold needed for the party's backing before picking up enough additional votes to secure the endorsement. Representative Maxine Waters attended the board meeting in San Diego and worked to help get the measure's supporters over the finish line, according to three people familiar with her efforts.

Before Sunday's vote, the contentious measure had drawn few endorsements from the party's highest-ranking elected officials, with Representative Ro Khanna the only member of California's congressional delegation to back it publicly.

A fight over who speaks for the party

SEIU-United Healthcare Workers West, the union that spearheaded the proposed levy, framed the endorsement as proof of grassroots Democratic support.

"This endorsement puts to rest the idea that California Democrats are not united by the billionaire tax – they are," said Dave Regan, the union's president. "Polling shows that more than 80% of registered Democrats support this critical solution to our healthcare crisis and now the Democratic Party of California has officially embraced that strong support through this endorsement."

Rusty Hicks, chair of the state party, characterized the endorsement process itself as deliberate rather than reflexive.

"Every endorsement we make is earned, not given," Hicks said. "California Democrats take a deliberative approach to our endorsement process that puts our values first and ensures our members have a meaningful voice in shaping the future of our state."

Read more: California billionaire tax push reignites debate on real economic impact

Sanders and Khanna have both championed the measure, arguing its revenue should flow to healthcare programs for middle- and low-income Californians rather than being treated purely as a symbolic gesture.

Newsom's opposition came well before Sunday's vote. He told the New York Times earlier this year there was "no question" the measure "will be defeated," and has since pivoted to calling for a national billionaire tax instead. Writing on Substack in June, he argued the measure's structure was flawed for directing revenue toward offsetting federal spending cuts rather than funding schools and housing.

"Wealth is movable, and it shops for the state with the lowest taxes," he wrote. "The fight belongs at the federal level, where this broken system was created in the first place."

Read more: Newsom wants nationwide billionaires tax as presidential bid may loom on the horizon - InvestmentNews

In a statement reported by Politico, a spokesperson for one arm of the opposition coalition – which includes Newsom, gubernatorial candidate Xavier Becerra, the California Teachers Association, California Professional Firefighters, and Planned Parenthood Affiliates of California – called the measure an "unreliable, untested" scheme that shortchanges healthcare, education and public safety.

The party's board also voted to formally oppose two billionaire-backed measures positioned to undercut Proposition 40, underscoring how the wealth-tax fight has bled into a broader ballot-measure contest this cycle. 

Newsom's own finances, disclosed days earlier

The intraparty fight comes just after Newsom's office released four years of his own tax returns, showing that he and his wife, filmmaker Jennifer Siebel Newsom, earned between $1.7 million and $2 million annually from 2022 through 2024, paying roughly half a million dollars a year in combined federal and state taxes.

As covered by The Guardian, the couple's income has stayed relatively consistent since Newsom took office in 2019 – when they also reported $1.7 million – apart from 2021, when the sale of a Marin County home lifted their income to $4.2 million.

Most of the Newsoms' income comes from winery and restaurant holdings placed in a blind trust, rather than his roughly $200,000 governor's salary; the PlumpJack Group, which he owns, is now run by his sister and cousin.

The release, covering more than 700 pages, arrived as the couple faces a Department of Justice inquiry Newsom has called politically motivated, with adversaries presumably hoping to hurt his credibility ahead of his planned 2028 presidential run.