Bernie Sanders and Ro Khanna rally for California Proposition 40 billionaire tax amid Democratic split

A major rift has emerged within the Democratic Party over California's Proposition 40, a November 2026 ballot initiative proposing a one-time 5% wealth tax on the state's roughly 200 billionaires. Senator Bernie Sanders and Representative Ro Khanna are actively campaigning for the measure, framing it as a fight for the working class. Meanwhile, Governor Gavin Newsom and several public sector unions oppose the tax, warning it will drive wealthy residents out of the state. Tech billionaires have poured over $252 million into defeating the measure, with Google co-founder Sergey Brin alone contributing $102 million.

Support from Bernie Sanders and Ro Khanna

• ▪Senator Bernie Sanders and Representative Ro Khanna held a joint rally in San Francisco on October 3, 2026, to campaign in support of Proposition 40.
• ▪Representative Ro Khanna challenged Governor Gavin Newsom to a debate over California's Proposition 40 and accused him of siding with billionaires to secure campaign funding for a potential 2028 presidential bid

Overview of Proposition 40

• ▪California Proposition 40 is a November 2026 ballot initiative that would impose a one-time, 5 percent wealth tax on billionaires residing in the state.
• ▪The revenue generated by California's Proposition 40 would primarily fund state healthcare programs, with 90 percent allocated to cover federal Medi-Cal cuts and the remaining 10 percent supporting education, food assistance, and administration

Revenue projections

• ▪The authors of California's Proposition 40, a health care union's initiative, estimated that the proposed wealth tax would generate one hundred billion dollars in revenue for California
• ▪The nonpartisan California Legislative Analyst's Office analyzed that California's Proposition 40 could generate tens of billions of dollars in the short term but could decrease future income tax revenues if wealthy residents relocate

SEIU-UHW leadership and controversy

• ▪Dave Regan denied accusations that he threatened other union officials while trying to build support for Proposition 40.
• ▪The Service Employees International Union-United Healthcare Workers West, led by president Dave Regan, authored and is the primary financial backer of California's Proposition 40, contributing approximately $32.4 million to the campaign

Governor Gavin Newsom's opposition

• ▪California Governor Gavin Newsom opposes California's Proposition 40, arguing that the state-level wealth tax is poorly written and would drive billionaires and businesses to relocate to other states
• ▪Governor Gavin Newsom proposed a national billionaire tax focused on loans taken against assets as an alternative to California's state-level Proposition 40.

Reasons for progressive opposition

• ▪The California Teachers Association opposes California's Proposition 40 due to concerns that wealthy residents relocating would decrease state revenues and harm school funding
• ▪Prominent progressive organizations, including Planned Parenthood, the California Teachers Association, and California Professional Firefighters, have aligned with Governor Gavin Newsom to oppose Proposition 40.

Billionaire responses to Proposition 40

• ▪Nvidia CEO Jensen Huang stated he is comfortable paying the proposed wealth tax and has not actively thought about its potential impact on his finances.
• ▪Tech investors Vinod Khosla and Mark Cuban have publicly criticized California's Proposition 40, warning that the Proposition 40 wealth tax will drive top wealth creators out of California
• ▪Several prominent Silicon Valley billionaires, including Peter Thiel, Sergey Brin, and Larry Page, have relocated or moved assets out of California in anticipation of Proposition 40.

Funding to oppose Proposition 40

• ▪Google co-founder Sergey Brin is the largest individual donor against California's Proposition 40, contributing $102 million to Building a Better California
• ▪Venture capitalist John Doerr and former Google CEO Eric Schmidt have contributed $30 million and $27 million respectively to oppose Proposition 40.
• ▪The anti-Proposition 40 political advocacy group Building a Better California has raised over $252 million to defeat the ballot measure.

Debatable claims

• ▪Wealth taxes should only be implemented at the national level rather than by individual states
• ▪Governor Gavin Newsom's opposition to Proposition 40 is justified
• ▪Billionaire spending against Proposition 40 undermines California's democratic process
• ▪California's Proposition 40 will do more harm than good to the state's economy