Prop 40: Despite Newsom's opposition, CA Democrats endorse billionaire tax measure

SAN FRANCISCO (KGO) -- The California Democratic Party has endorsed Proposition 40, a November ballot measure that would impose a one-time 5% tax on the assets of California billionaires, handing supporters a political victory despite opposition from Gov. Gavin Newsom and several influential labor groups.

The endorsement, approved over the weekend, bolsters proponents' efforts to convince voters to back the measure, which supporters say would help fund California's healthcare system amid concerns about federal healthcare funding cuts.

Prop. 40 is being led by SEIU-United Healthcare Workers West, which argues the tax would require California's wealthiest residents to help offset healthcare funding losses and keep hospitals and emergency rooms operating.

"This endorsement puts to rest the idea that California Democrats are not united by the billionaire tax - they are," said Dave Regan, president of SEIU United Healthcare Workers West. "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."

Supporters say Prop. 40 would apply only to Californians with a net worth that exceeds $1 billion. According to the campaign, the tax could generate about $100 billion and would be paid by roughly 200 billionaires.

The party endorsement comes as prominent California Democrats and labor organizations remain divided over the measure. Several sources with experience working on ballot measure campaigns told ABC7 News that state party endorsements typically carry limited influence with rank-and-file Democratic voters.

Opponents have instead highlighted resistance from Newsom and a coalition of Democratic-aligned organizations.

In a statement, the No on 40 campaign said: "Governor Newsom, Democratic Candidate for Governor Xavier Becerra, the California Teachers Association, California Professional Firefighters, Planned Parenthood Affiliates of California, and so many others are standing together against Prop. 40 because it's bad for our budget, bad for our economy, and bad for our future. We need smart, durable solutions to our biggest challenges, not unreliable, untested schemes that shortchange healthcare, education, and public safety."

A spokesperson with the No on 40 campaign said it estimates California already stands to lose about $500 billion in tax revenue to the general fund from six billionaires who left the state before the start of 2026.

The debate over the measure has also drawn attention from the business community. At an unrelated event in San Francisco on Monday, JPMorgan Chase CEO Jamie Dimon was asked about his views on wealth taxes.

"We've studied wealth taxes around the world and they've never worked," Dimon said. "Should it be proper taxation? Of course. Would you be aggravated to be in the lower 20% watching the rich, I completely understand that. And so, you know, to me when you talk about tax policy, it should be policy that helps drive competitiveness, business capital formation and growth that is best for all your citizens."

Dimon's comments reflect arguments frequently made by business leaders and wealthy individuals who oppose the proposal. Many of those opponents are expected to play a significant role in the campaign leading up to the November election, as voters weigh competing arguments over whether a billionaire wealth tax would help stabilize healthcare funding or create new economic risks for the state.