California Democratic Gov. Gavin Newsom has had a brutal couple of weeks.
Newsom was forced to respond last week after a woman publicly discussed a past extramarital affair with Newsom almost two decades ago.
Newsom and his wife are also under greater scrutiny for his prolific use of “behested payments” as federal investigations involving both the governor and First Partner Jennifer Siebel Newsom continue to garner attention.
Now, Democrats just defied a directive from Newsom, and he’s scrambling.
California Democrats blew up the party this weekend when its resolutions committee voted to recommend endorsing a punitive one-time 5 percent tax on the state’s roughly 200 billionaires, openly defying both outgoing Newsom and gubernatorial nominee Xavier Becerra.
The committee’s Saturday decision moves Proposition 40, formally the California 2026 Billionaire Tax Act, closer to a potential official party endorsement before the Nov. 3 ballot.
But full approval still requires at least 60 percent of delegates at Sunday’s general session.
Alternatively, a simple majority of the delegates might vote to take no position, or to call for a separate debate on the floor.
The committee’s move underscores a growing rift between the party’s elected leaders and its activist base on how aggressively Sacramento should go after private wealth, whatever the outcome.
Newsom has long opposed a wealth tax at the state level, warning that if California acted alone, it would give lower-tax states a competitive advantage. They can just move, he argues.
Instead, he has sought a federal version to close the exit door.
Becerra had already staked out similar territory on Friday, the day before the committee vote, announcing his positions on several measures in November.
He supported Proposition 3, which would make an existing income tax surcharge on high earners permanent to help fund education, but pointedly refused to back the billionaire tax.
The resolutions committee ignored both.
The party’s grassroots activists are now at open war with the sitting governor and the candidate who wants to succeed him.
The divide is stark in a state where Democrats control every major office and legislative chamber.
Newsom and Becerra aren’t battling Republicans. They’re battling the left wing of their own party.
The main backer of Proposition 40 is Dave Regan, president of SEIU United Healthcare Workers West.
His local has shepherded the measure thru qualification and the current endorsement battle.
Proponents say the tax is needed to offset what they call $100 billion in federal health care cuts under the Trump administration.
They say the levy would raise $100 billion from California’s small pool of billionaires.
Outside endorsements include Sen. Bernie Sanders, Rep. Ro Khanna, AFSCME California and the Teamsters California.
The California State Council of Laborers does not support the measure.
It has also drawn criticism from the California Police Chiefs Association.
Even the SEIU California statewide executive board — the larger arm of the same union leading the campaign — voted recently to stay neutral.
The powerful California Federation of Labor Unions is expected to weigh in later this week and its decision could be pivotal.
Proposition 40 would levy a one-time 5 percent assessment on the net worth of some 200 people. The haul would fill a huge budget gap, say supporters.
Opponents, including Newsom and Becerra, say such a concentrated burden on a highly mobile group would drive away those residents — and their capital, jobs and philanthropy.
California already has the highest top marginal income tax rate in the country.
A wealth tax would be a test of whether the state’s richest residents value living in California more than they value keeping 5 percent of their fortunes.
Newsom’s preferred federal alternative would remove the incentive to relocate by imposing a nationwide tax that could not be avoided.
It would also need congressional approval, making it mostly theoretical in the current political environment.