California Wealth Tax Proposal Causes Internal Strife Among Democrats

California’s proposed billionaire wealth tax is tearing Democrats apart as the party’s biggest names line up against a union-backed ballot measure.

Democratic California Gov. Gavin Newsom called the proposal “really damaging” and “bad economics” in an interview with Politico this week. He warned the measure has already triggered an exodus of wealthy residents from the Golden State.

“This is my fear,” Newsom told Fox Business. “It’s just what I warned against. It’s happening.” (RELATED: Gavin Newsom Throws Own Team Under The Bus)

The tax proposal has already triggered a billionaire exodus. Google co-founder Larry Page moved dozens of business entities out of California in December, Fox Business reported.

Fellow Google co-founder Sergey Brin relocated 15 LLCs to Nevada in the days before Christmas. Oracle Chairman Larry Ellison sold his San Francisco mansion for roughly $45 million.

Collectively, the amount of Billionaire wealth that has left California in the last month (!) is now in excess of $700B.

That means the $2T of California wealth they expected to tax is now down to $1.3T and falling quickly. I would not be surprised if 2026 ended with less than… https://t.co/J0qIYrKJXB

— Chamath Palihapitiya (@chamath) January 9, 2026

The split extends to Democrats running to replace Newsom as governor. Former Rep. Katie Porter came out against the measure, telling Bloomberg it “could end up hurting our ability to fund other key priorities like education and food assistance.”

Former Los Angeles Mayor Antonio Villaraigosa also opposes the tax. He said the billionaires will flee if voters approve it. “We pass that wealth tax, they’re all going. They’re mobile,” Villaraigosa said, according to the San Bernardino Sun.

Four of the eight major Democratic gubernatorial candidates now formally oppose the measure. None have endorsed it.

The proposal has also fractured California’s powerful labor movement, Politico reported. Service Employees International Union – United Healthcare Workers (SEIU-UHW) leader Dave Regan pushed forward with the ballot initiative after a meeting where his union was the only one to support it. Other union officials accused him of acting without consensus.

Venture capitalist Peter Thiel donated $3 million to the California Business Roundtable to fight the measure, Fortune reported. Opponents predict spending could exceed $75 million to defeat it.

The initiative would impose a one-time 5% tax on residents worth more than $1 billion. Backers must collect roughly 875,000 signatures to qualify for the November ballot. Polling from the New York Post showed initial support at 53%. That number dropped to 41% after voters heard arguments from both sides.