Sanders and Newsom clashed over a proposed tax on California billionaires

LOS ANGELES (AP) — As national Democrats search for a unifying theme ahead of the fall’s midterm elections, California’s proposal to impose a hefty tax on billionaires turns some of the party’s most prominent figures into adversaries at a time when Democrats can’t afford to be divided from within.

Bernie Sanders will be in Los Angeles on Wednesday to campaign for a tax proposal that has caused a stir in Silicon Valley, where tech giants threaten to leave the state. Democratic Gov. Gavin Newsom is among his outspoken opponents, warning that it could leave state finances in crisis and put the state at a competitive disadvantage nationally.

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Sanders plans to hold a rally in the late afternoon near downtown, and in the past he has attended large crowds in the heavily Democratic city. The Vermont senator, a Democratic socialist, is popular in California — he quickly won the state’s 2020 Democratic presidential primary. He has been protesting for decades against what he describes as wealthy elites and the growing gap between rich and poor.

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

Sanders wrote on the social media platform X that he strongly supports the tax “at a time of unprecedented growth in wealth and income inequality.”

“Our nation will not prosper when too few own too much,” Sanders wrote.

The debate over the proposal is taking place at a time when voters in both parties are expressing unease about economic conditions and what the future will bring for a politically divided nation. Distrust of government – ​​and its ability to get things done – is widespread.

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

“The issues that will really motivate Democrats this year, affordability, the cost of health care, school cuts, none of them will be fixed by this proposal,” said Brian Brokaw, a longtime Newsom adviser who leads a political committee that opposes the tax. “If true, they will get worse.”

Midterm elections usually punish the party that controls the White House, and Democrats hope to gain enough seats in the US House of Representatives to oust the narrow Republican majority in the chamber. In California, reorganized House districts approved by voters last year are expected to help the party pick up as many as five additional seats, which would leave Republicans in control of only a handful of districts.

“It’s always better for one party to have political debate centered on issues where the other party unites and the other party divides,” 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 on different sides is not ideal.”

With the idea of ​​taxing billionaires so popular among many voters, “this could be a good way for Democratic candidates to rally this side and break through the group,” Schickler added in an email.

She’s already been pumped into the gubernatorial race and the race is on the ballot. Republicans Chad Bianco and Steve Helton, both running for governor, warned that the tax would wipe out jobs. San Jose Mayor Matt Mahan, a Democratic gubernatorial candidate, said inequality starts at the federal level, where the tax code is riddled with loopholes.

Coinciding with Sanders’ visit and the upcoming Democratic convention in the state this weekend, opponents are sending targeted emails and social media ads aimed at influencing party insiders.

It’s unclear whether the proposal will go on the ballot, as supporters must collect more than 870,000 petition signatures to put it in front of voters.

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

Newsom has long opposed state-level wealth taxes, believing such fees would be a disadvantage to the world’s fourth-largest economy. While California is strapped for cash and is considering a run for president in 2028, he is trying to block the proposal before it reaches the ballot box.

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