California Dreamin'? Voters Reject 'Billionaire' Wealth Tax

Go figure. We finally found a class-warfare proposal too insane even for California voters. This time, anyway.

Late last night, the Associated Press made the call on the SEIU's supposedly one-time wealth tax, which was supposedly limited to 'billionaires.' The measure flopped with voters after running into some surprising pushback from outgoing Governor Gavin Newsom and a massive campaign from the tech industry:

California voters rejected a proposed billionaire tax, ending a heated and expensive fight over what could have been the nation’s first modern tax on wealth.

The Associated Press called the race late Monday as the ballot initiative, Proposition 40, was trailing by about 5.5 points after last week’s election.

The outcome is a significant blow to supporters who had hoped to create a template for taxing wealth that could extend far beyond California. It also leaves the state’s next governor, Democrat Xavier Becerra, with a major budget problem. 

Proposed by a healthcare-workers’ union, the initiative sought to impose a one-time, 5% tax on the net assets of California residents worth more than $1 billion at the end of this year. The union had estimated the tax would raise $100 billion over five years to offset looming Medicaid cuts that President Trump signed into law last year.

The SEIU, one of the largest healthcare unions in the country, spent $30 million pushing this tax. However, other unions and left-leaning PACs such as Planned Parenthood, the teachers union, and other public and private sector unions. The SEIU demanded the wealth tax in response to cuts in state medical-services payments, likely prompted by the costs incurred to cover health costs of illegal aliens during Newsom's tenure.

The tech industry, led by Google founder Sergey Brin, spent several times that amount to oppose Prop 40. Brin and his allies put another proposition on the ballot that would prohibit wealth taxes in the future as well, for reasons we'll get to in a moment. That race is still too close to call, but the Wall Street Journal reports that it has a slight lead with more mail-in ballots left to count. 

Brin and his allies will need it to succeed. The SEIU wants to put that measure on the ballot again in 2028:

The measure attracted support from liberal leaders beyond the state, including Vermont Sen. Bernie Sanders, who rallied in cities across California in the race’s closing weeks to urge voters to pass it.

The “Yes on 40” campaign said the measure sought to protect healthcare for Californians and that they will put a tax back on the ballot in 2028 if patients are not protected.

“Buying an election is not the same as winning the debate,” the measure’s proponents said in a statement on Monday. “The billionaires may have bought themselves a temporary victory at the ballot box, but they have not bought themselves an end to this debate, and this is only round one.”

According to the AP's exit polling, Prop 40 got most of its support from voters under 30 years of age and those with household incomes under $100,000. Older voters with higher incomes could apparently do math:

The AP Voter Poll indicates that the majority of young voters in California — those younger than 30 — voted “yes” on Proposition 40. Older voters were far less supportive, with roughly 7 in 10 voters who were 65 and older saying they voted “no” on the ballot measure.

About half of voters with a household income under $100,000 annually said they were in support of the initiative. Closer to 6 in 10 California voters with an income of $100,000 or higher said they were opposed. ...

Some traditional Democratic allies, including Planned Parenthood and the California Medical Association, were part of a coalition opposing it. They were concerned about how the tax revenue would be divvied up and about the potential impact on the state’s budget if there was a mass exodus of wealthy taxpayers. California’s budget relies heavily on the income tax of the state’s richest residents.

Exactly. California Democrats have spent the last 20 years hollowing out the state's middle class, much of which has fled with its capital for states with lower tax and regulatory burdens. That has led to an increasingly stratified environment where only those wealthy enough to evade and/or buffer the impacts of those policies live with those too poor to avoid them. Prop 40 would have started a stampede at the top that threatened to collapse California's public spending altogether. 

That may be unavoidable, though. The WSJ reports that the failure of Prop 40 leaves governor-elect Xavier Becerra "a major budget problem" without ever explaining what that problem would be. Did Newsom oppose Prop 40 while budgeting its revenue into the state's projections? That's the only reason why Prop 40's failure would create a budget issue, rather than Becerra having to deal with California's ongoing budget woes that Democrat policies have created for decades. Just how opposed to Prop 40 was Newsom, really?

Editor's Note: The Democrat Party has been infected by socialism, and it's spreading FAST. Democrats are claiming there's nothing to worry about, but we know the truth.

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