Bernie Sanders and Gavin Newsom become adversaries over push to tax California billionaires

LOS ANGELES– As national Democrats search for a unifying theme ahead of fall midterm elections, a California proposal to levy a hefty tax on billionaires is turning some of the party’s top figures into adversaries just when Democrats can least afford division from within.

Bernie Sanders will be in Los Angeles to campaign Wednesday for the tax proposal that is sparking an outcry in Silicon Valley as tech titans threaten to leave the state. Democratic Gov. Gavin Newsom is among its vocal opponents, warning that it could leave public finances in crisis and put the state at a competitive disadvantage nationally.

Sanders plans a late afternoon rally near downtown, and in the past has brought crowds to overflow in this overwhelmingly Democratic city. The Vermont senator, a democratic socialist, is popular in California — he won the state’s 2020 Democratic presidential primary in a landslide. He has railed for decades against what he describes as rich elites and against the growing gap between rich and poor.

A major health care union is trying to put a proposal before voters in November that would impose a one-time 5% tax on billionaires’ assets — including stocks, artwork, businesses, collectibles and intellectual property — to make up for cuts in federal funding for low-income health care signed into law by President Donald Trump last year.

Sanders wrote on the social platform

“Our nation will not prosper if so few own so much,” Sanders wrote.

Debate over the proposal comes at a time when voters in both parties are expressing unease about the state of the economy and what the future holds for a politically divided nation. Distrust of government – ​​and its ability to get things done – is widespread.

The proposal has driven a wedge between Newsom and prominent members of his party’s progressive wing, including Sanders, who has said the tax should serve as a model for other states.

“The issues that are really going to motivate Democrats this year, the affordability and cost of health care and the school cuts, none of them will be solved by this proposal. In fact, they would be made worse,” said Brian Brokaw, a longtime Newsom adviser who heads a political committee opposing the tax.

Midterm elections typically punish the party that controls the White House, and Democrats hope to win enough seats in the House of Representatives to overturn the House’s slim Republican majority. In California, the redrawing of House districts approved by voters last year is expected to help the party win up to five additional seats, leaving Republicans in control of just a handful of districts.

“It’s always best for a party to focus political debate on issues where you are united and the other party is divided,” said Eric Schickler, a political science professor at the University of California, Berkeley. “Having an issue like this where Newsom and Sanders – among others – are in different camps is not ideal.”

With the idea of ​​taxing billionaires popular among many voters, “this may be a good way for Democratic candidates to rally this camp and break out of the pack,” Schickler added in an email.

This has already been reflected in the gubernatorial race and election. Republicans Chad Bianco and Steve Hilton, both running for governor, warned the tax would kill jobs. San Jose Mayor Matt Mahan, a Democratic candidate for governor, said inequalities start at the federal level, where the tax code is riddled with loopholes.

Coinciding with Sanders’ visit and the state’s upcoming Democratic convention this weekend, opponents are sending targeted emails and social media ads intended to influence party members.

It’s unclear whether the proposal will come to a vote — supporters need to gather more than 870,000 petition signatures to put it before voters.

The burgeoning competition has already exposed a tangle of competing interests, with millions of dollars flowing to political committees.

Newsom has long opposed state-level wealth taxes, believing such levies would be disadvantageous to the world’s fourth-largest economy. At a time when California is cash-strapped and he is considering a 2028 presidential run, he is trying to block the proposal before it reaches the ballot.

Analysts estimate that an exodus of billionaires could mean a loss of hundreds of millions of dollars in taxes for the nation’s most populous state. But supporters say the funding is needed to offset federal cuts that could leave many Californians without vital services.