SACRAMENTO, California \u2014 A contentious proposal to impose a one-time, 5 percent tax on California billionaires\u2019 assets is headed to the November ballot after the labor leader behind it rebuffed an intense pressure campaign led by Gavin Newsom to back down.<\/p>\n
Its supporters will likely be badly outspent, but they are betting that anger at billionaires and President Donald Trump\u2019s health care cuts will outweigh warnings that the tax would hurt California\u2019s economy and drive wealthy residents \u2014 and their tax dollars \u2014 out of state.<\/p>\n
The contest that has consumed California politics<\/a> unfolds amid a broader debate within the Democratic Party over economic inequality and taxing the wealthy, punctuated by progressives flexing renewed political strength<\/a> in places including New York last week.<\/p>\n Backers of the California billionaires tax, including Rep. Ro Khanna and Sen. Bernie Sanders of Vermont, say the measure is needed to offset federal spending cuts that they argue will force hospital closures and widespread job losses. Its opponents, from Newsom to Silicon Valley billionaires like Google co-founder Sergey Brin, counter that it would drive ultrawealthy residents and their tax dollars out of state while undermining California\u2019s business climate.<\/p>\n The proposed levy, which proponents refused to withdraw from the ballot by Thursday\u2019s deadline, has prompted Silicon Valley players like Brin to pour millions of dollars into advancing rival ballot measures<\/a> and shaping the state Legislature<\/a>. Ultra-wealthy opponents are now poised to unleash enormous sums to defeat the wealth tax.<\/p>\n But as billionaires fund the opposition, Democratic-aligned groups are lending it credibility. In recent weeks, with Newsom leading the charge, unions representing teachers, police officers, carpenters and construction workers have come out against it<\/a>, as have health care groups like Planned Parenthood, warning it could do more harm than good by costing the state revenue in the long term and undermining other labor goals.<\/p>\n \u201cThe dangerous wealth tax directly threatens vital funding for education and schools, healthcare and clinics, public safety, and infrastructure projects by making California\u2019s revenue even more volatile,\u201d a coalition that includes the California Medical Association and the California School Boards Association said in a statement.<\/p>\n