Coming in 2026: A battle over California billionaire tax proposal
Good morning, happy December and welcome to the A.M. Alert!
BATTLE LINES OVER A WEALTH TAX
As Benjamin Franklin once said, “In this world, nothing is certain except death and taxes.”
In California, the list could also include regular political brawls over tax laws.
Two battles are already taking shape for 2026, including over a high-profile billionaire’s tax.
The measure, which was filed with the attorney general’s office in October, would impose a one-time 5% tax on Californians with assets worth $1 billion or more. The funding would be used to backfill cuts to health care and food assistance programs that were part of President Trump’s One Big Beautiful Bill Act.
Its backers – labor unions representing health care workers and the leader of one of the state’s largest nonprofit providers – argue the revenue would come from just 200 California billionaires and would stabilize hospitals and community clinics, along with the jobs they provide.
Similar wealth tax proposals have failed to get far in the legislature under opposition from Gov. Gavin Newsom, who’s used his bully pulpit to defend the current setup of the state’s progressive tax structure.
Newsom will also be opposing the new ballot measure, said adviser Dan Newman, who recently set up a committee called “Stop the Squeeze” with colleague Brian Brokaw to fight the initiative. The California Business Roundtable last week set up its own committee in opposition.
But a wealth tax could get more debate among Newsom’s potential successors – especially with affordability and wealth inequality front-of-mind for voters.
One Democratic candidate, state superintendent Tony Thurmond, recently endorsed a wealth tax, saying the “growing gap between the poor and the billionaire class is unsustainable.”
A long-simmering fight over voter-approved local taxes could also come to a head next year.
The Howard Jarvis Taxpayers Association is pushing a 2026 measure to tighten rules for voter-approved special taxes and taxes on real estate transfers. It’s a narrower version of the Taxpayer Protection Act, which was removed from the ballot last year after the state Supreme Court deemed it too broad.
CA CONGRESSIONAL LAWMAKERS SCORE LOW IN CONSERVATIVE TAX RANKINGS
Via David Lightman
Most California lawmakers are no friends of taxpayers, says the conservative National Taxpayers Union.
The group released its 2024 congressional ratings last week, and gave Sen. Alex Padilla a 7% support score. The state average for California’s House members was 27%.
To be considered a “taxpayers’ friend,” a lawmaker has to reach 85%. No one in California did. Nine senators, topped by Sens. Mike Lee, R-Utah, and Rand Paul, R-Ky., got the loftiest designation. Eleven House members, led by Rep. Chip Roy, R-Texas, were on the friend list.
Among California lawmakers, Rep. Tom McClintock, R-Elk Grove, came closest at 74%, worth a B minus. A B means the congressman has a “good voting record on controlling spending and taxes,” the NTU said.
The lowest House California score was retired Rep. Grace Napolitano, D-El Monte, at 9%, who left office in January.
The group explains that its findings represent “the strength of support for reducing wasteful government spending, opposing higher taxes, and often opposing burdensome regulations that can stifle U.S. economic growth. In general, a higher score is better because it means a member of Congress voted to spend less money.”
To compute the score, the group’s federal budget experts give a weight to each roll call vote. Votes with relatively less impact on the size of the federal budget and deficits, or size and scope of the regulatory state, get lower weights.
Higher weights are given to votes on measures with a significant impact on spending, deficits, taxes or regulations.
And, said NTU, “consideration was given to the longer-term effects of a vote on future fiscal policy, even if relatively few tax or deficit-financed dollars might be immediately at stake.”
QUOTE OF THE DAY
“I am not endorsing her alleged crimes, and of course, I do not agree with Dana’s politics at all. But I fully endorse friends being there for friends.”
- Republican consultant Jon Fleischman on a fundraising page set up for ex-Newsom aide Dana Williamson
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