Nothing has the Democratic Party more split than taxing billionaires. San Francisco Democrats have broken with their statewide party over California’s proposed billionaire wealth tax, rejecting Proposition 40 in a lopsided vote that exposes a growing divide over whether taxing extreme wealth is worth the potential economic consequences. The San Francisco Democratic Party voted 17–4 to oppose Proposition 40—with five members abstaining, five members absent, and one member with no endorsement. Nancy Pelosi chose not to endorse the measure. This comes just weeks after the California Democratic Party endorsed the measure in August after a contentious vote that succeeded above the 60% threshold.
California already depends heavily on wealthy residents for tax revenue, and a tax that encourages a portion of them to leave could undermine the state’s existing revenue base—and prove especially problematic in San Francisco, where the technology industry has produced a large concentration of founders, investors, and executives whose wealth has amassed in stock rather than cash. Six billionaires have already ended their California residency ahead of the Jan. 1 deadline.
