WHAT YOU NEED TO KNOW
  • A poll found 65% of California Democrats support Proposition 40, but most prominent Democratic officeholders oppose it or remain silent.
  • Bernie Sanders, Reps. Ro Khanna and Judy Chu support the onetime billionaire wealth tax.
  • Sergey Brin has spent $187 million opposing the measure, while supporters have mounted no comparable media campaign.
  • An NBER paper estimated the tax could raise roughly $100 billion despite concerns about billionaires leaving California.

Bernie Sanders took center stage at a Los Angeles rally supporting Proposition 40, the onetime billionaire wealth tax headed for California’s November ballot. A late September Los Angeles Times and UC Berkeley poll found that 65% of Democrats in the state support the measure.

That support extends to the executive committee of the state Democratic Party, yet the roster of elected officials willing to appear beside Sanders was strikingly thin. Rep. Ro Khanna joined him, and the parade of prominent Democratic officeholders essentially stopped there.

The response from California’s supposedly liberal elected leaders belongs in the annals of political cowardice. The measure represents an extension of progressive taxation, a defining liberal objective since the late 19th century, and six Nobel laureates endorsed it, including Joseph Stiglitz and Paul Krugman.

UC Berkeley economists Emmanuel Saez and Gabriel Zucman helped formulate Proposition 40. Nevertheless, many of the Democrats who routinely claim progressive credentials have either opposed it or discovered an acute inability to speak.

Gov. Gavin Newsom leads that retreat and opposes the measure after a political career boosted by Silicon Valley fortunes. Xavier Becerra, identified as Newsom’s certain successor as governor, also opposes it, as does Los Angeles Mayor Karen Bass.

Bass faces Los Angeles City Council member Nithya Raman in the upcoming midterm election. Raman, a member of DSA whose candidacy the organization has backed, has taken no position, leaving her to the right of billionaire progressive Tom Steyer, who sought the governorship in the June primary.

Rep. Judy Chu, who represents the San Gabriel Valley in Congress, is the only other notable elected Democrat backing Proposition 40. Of California’s remaining Democratic members of Congress, 41 have opposed the measure or remained silent, though Maxine Waters has made supportive comments without issuing a formal endorsement.

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Part of that silence stems from Dave Regan of an SEIU health care local, who formulated the measure. Regan has used his union’s treasury for signature gathering efforts that place proposals on the ballot without providing the resources needed to campaign for them after they qualify.

California media reports have focused heavily on Regan’s history of using ballot measures as leverage for unrelated gains for union members. The Los Angeles Times reported that Regan offered to abandon Proposition 40 if Newsom helped him win contracts at several hospitals, an account Regan denied.

The result is a ballot measure with no media campaign promoting it while Silicon Valley oligarchs pour several hundreds of millions of dollars into opposition advertising. That imbalance has made it easier for Democratic elected officials to remain conveniently quiet despite broad support among their own voters.

Coverage has dwelled more on Regan’s checkered record than on the tax itself or its chief opponent, Sergey Brin. Brin has supplied $187 million to the opposition campaign from a fortune Forbes values at $263 billion, ranking him fifth on the magazine’s list of the world’s richest people.

Brin, a supporter of President Trump, has moved to the Nevada side of Lake Tahoe to escape the proposed onetime 5% wealth tax. Newsom has repeatedly warned that the departure of Brin and other billionaires could impoverish California, where roughly 200 billionaires reside.

An NBER paper challenges the financial basis for that warning. It found that the roughly $100 billion raised by the tax would not be offset by lost income tax revenue from the departure of all 200 billionaires until 25 years had passed.

If only 50 of those billionaires left, the paper found, it would take a full century for those income tax losses to equal the wealth tax revenue. Grim predictions about wealthy people fleeing tax increases also routinely fail to materialize, according to the article’s argument.

Meanwhile, California’s statewide races hold little suspense, with Democrats leading Republican challengers by roughly 20 percentage points. Proposition 40 remains the genuinely uncertain contest, burdened by enormous oligarch spending and the timidity of elected Democrats unwilling to follow their own voters.