The California wealth tax ballot proposition is dividing Democrats and their activists with a week left until the election, and it is on pace to lose among the state’s primarily Democratic voting base.
California’s “one-time” confiscation of 5% of billionaires’ wealth is polling underwater. A California Post/McLaughlin & Associates poll has the tax, Proposition 40, trailing among voters, 32.5% to 52.6%, while a Citrin/Politico poll showed the proposition leading, 46%-43%, still short of majority support. Further complicating matters is that Proposition 40 could pass and still be voided by Propositions 41 and 42 if either one passes with more support than Proposition 40.
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Also complicating matters is how Proposition 40 is dividing Democratic politicians and the activist groups they court. Gov. Gavin Newsom opposes Proposition 40, recognizing that it will lead (and, in fact, already has led) to billionaires fleeing the state and taking their taxable incomes with them. Rep. Ro Khanna, a Proposition 40 proponent, has called Newsom “the poster child to ban any new wealth tax on billionaires.” Actor and prominent Democratic activist Mark Ruffalo has concurred, saying that not supporting Proposition 40 is “disqualifying” for Newsom’s future presidential aspirations.
California’s Democratic nominee for governor, Xavier Becerra, also opposes Proposition 40, but the California Democratic Party voted to endorse it. Even California’s Democratic labor unions are split, with AFSCME, the Teamsters, and the California Labor Federation supporting the wealth tax, while the California Teachers Association opposes it. The California Medical Association and Planned Parenthood also oppose the measure.
The divisions even cut through union lines. The tax was introduced and put on the ballot by the Service Employees International Union-United Healthcare Workers West, but the statewide SEIU has declined to take a position.
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With Democrats divided on the measure, it is no surprise that California’s Democratic voter base is similarly split. The effects of the tax are already taking a toll on California’s finances, though. Stanford economists have determined that seven billionaires have already moved out of the state, taking with them some $540 billion in taxable income. The estimated revenue from the wealth tax has dropped from $100 billion to $30 billion, but that revenue would likely be offset by tax losses resulting from the departures.
California Democrats have managed to achieve two things through this battle over the wealth tax. The first is that they have found a tax increase that not all California Democrats would support. The second is that they have managed to cause billionaires to move out over a tax that hasn’t even been passed yet and might not pass at all. California Democrats have disagreed with each other for the first time on a major issue, and they have still managed to damage the state’s future as a result.
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[ H/T Washington Examiner ]
