California’s billionaires, individually and collectively, are spending wildly to try to defeat the state initiative that would tax their wealth. If you watch TV or use social media, you’ve likely already been inundated with scaremongering that forecasts rich person flight from the state and other miseries should the one-time tax pass.
But when supporters of Proposition 40 speak on the initiative, they do so with a passion and conviction that wealthy figures trying to protect their treasures — think of Google’s Sergey Brin and Larry Page, or Meta’s Mark Zuckerberg — never seem to match. These supporters talk about protecting the most vulnerable residents of the state; of maintaining basic health care services in the face of defunding by President Donald Trump’s administration and Congress; of the absurdity of the ultrarich trying to shield their wealth behind walls of stock options and investments.
The supporters number in the several millions. They are leading in most polls. And many of them are unapologetically on the attack — including the leader of arguably the most powerful federation of unions in the state.
“I’ve always been very honest that I think billionaires shouldn’t exist,” Lorena Gonzalez, president of the California Federation of Labor Unions, said in a phone interview this week. “It doesn’t bother me in the least to tax billionaires out of existence.”
Gonzalez’s federation, the umbrella organization for 2.4 million unionized workers in the state, has strongly endorsed Prop. 40. And Gonzalez, a former longtime member of the state Assembly, said her group will be trying to get the initiative passed in the November election, including organizing a statewide text bank and mailing campaign.
The wealth tax is hardly the only issue on the California Labor Federation’s agenda this election. But the heart of the organization’s endorsement, Gonzalez said, is “a duty to represent this movement” by honoring what the federation’s members say they care about.
“We have seen polling after polling of young people, union members under the age of 45, and they want this initiative with like 65%, 75% support, you know?” Gonzalez said. “This is what they believe the labor movement should be fighting for — and I’m proud that we actually are.”
Prop. 40 is designed to backfill federal funding for critical health care programs like Medi-Cal and local clinics — funding that is due for steep cuts. Proponents estimate it would raise upward of $100 billion by placing a one-time tax of 5% on the total net worth of California’s billionaires, who number slightly more than 200.
The tax is payable over five years. It excludes directly held real estate (billionaires’ mansions), pensions, and certain retirement accounts, and it applies only to those who held a net worth of at least $1 billion on Jan. 1, 2026. The resulting money would be used almost entirely on health care services, with about 10% going for public food assistance and education programs.
Opponents of the measure argue it’s a poorly designed mechanism that will ultimately cost the state money and predict that wealthy residents will flee elsewhere to avoid being taxed. They also raise the prospect that the temporary tax could lead to a permanent one (although that couldn’t happen without an entirely new statewide referendum).
For Gonzalez, who took over at the Cal Labor Federation in 2022, this landscape is familiar. As a Democrat from San Diego who served almost a decade in the Assembly, she authored a number of measures aimed at increasing access to health care in the state.
On the subject of this initiative, the labor leader is clear about the source of the problem.
“This was created by Trump,” Gonzalez said. “He gave billionaires tax breaks, and the way he funded it was by doing things like cutting $100 billion from California.” (Federal funding cuts to Medicaid under the One Big Beautiful Bill Act have been estimated at $1 trillion nationally, with California specifically losing roughly $30 billion annually.)
The GOP-led Congress was more than willing to do Trump’s bidding in going after Medicaid, the low-income health care program known as Medi-Cal in California. That’s consistent with Trump’s agenda of defunding food assistance like SNAP, public housing programs and K-12 education, in favor of more defense spending and tax cuts for the wealthy.
All states will suffer under the cuts, including many of those that carried Trump to victory in 2024. Only California is proposing to tax its own ultrawealthy individuals in an attempt to stave off the worst effects of the health care funding reductions.
Gonzalez is among those who have long supported a national wealth tax. But with no realistic prospect of that happening, the labor leader said that the California measure needs to pass in order to allow the state to simply continue providing basic health care to its residents. More than a third of the state’s population, nearly 14 million people, depend upon Medi-Cal for such care.
Billionaires like Google’s Brin, along with other Prop. 40 opponents, have already spent well north of $127 million to defeat the Billionaire Tax via competing ballot measures — many multiples of the best estimates of what proponents are spending. A group largely funded by Brin also is promoting competing ballot initiatives that, if passed, would effectively gut the tax.
“Can you imagine if these same people had instead said, ‘We know we have a health care crisis. Maybe we can help bridge the gap?’” Gonzalez said. “Even the titans of old days invested in social structures, public education, the arts. I just don’t think our system can work when billionaires only want to enrich themselves and become even more powerful.”
The California Labor Federation, which counts health care workers among the 2.3 million members in its affiliated organizations, is not the only union backing Prop. 40. The measure was sponsored by the Service Employees International Union-United Healthcare Workers West, and counts multiple powerful unions and the California Democratic Party among its supporters. (Disclosure: SEIU is a financial supporter of Capital & Main.)
The measure has been opposed by a few notable unions, including the California Teachers Association. (Disclosure: CTA is a financial supporter of Capital & Main.) But public opinion has largely favored the initiative since it qualified for the November ballot.
SEIU-UHW is embroiled in a controversy, with its president, Dave Regan, accused of trying to extort support for Prop. 40 from other union leaders and, in one case, physically assaulting a former executive director. (Regan has denied the charges.) Gonzalez said that most voters “don’t know who Dave Regan is,” adding that her organization’s support for Prop. 40 is a policy decision, not a leadership one.
The state’s largest newspaper, the Los Angeles Times, which is owned by billionaire Patrick Soon-Shiong, weighed in last week with an unsigned editorial against the initiative. And the billionaires’ own ad campaign is heavily focused on the unsubstantiated threat that the ultrawealthy will flee the state en masse if they’re taxed on their net worth.
Gonzalez is unmoved.
“You don’t like this solution? What is your solution, then?” she asked. “People are going to die. People are going to lose their jobs, and we know that all the other costs are going to go up as a result, including to people with private health insurance or Covered California.
“Trump gave the billionaires tax breaks. Out of fairness, this one-time tax on them is a way to bridge the gap — until we get a new president.”
