Labor unions split as ballot campaigns spend over $300 million
California voters will decide on Nov. 3 whether to approve a proposed one-time, 5% wealth tax on residents with net assets of $1 billion or more at the end of 2026. The measure would be the nation’s first-ever wealth tax targeting billionaires. Proponents estimate it would raise around $100 billion from between 200 and 300 California billionaires. The campaign has unfolded in California for the past year, even in a state described as one of the nation’s bluest. It has been one of the costliest ballot fights in California’s history. The three ballot initiatives involved have spent more than $300 million in contributions, roughly 90% aimed at defeating the wealth tax.
The latest independent polls show slightly more support than opposition, with large numbers of undecided voters. Democratic voters show much stronger support despite opposition from many party leaders. Katie Porter, a progressive former congresswoman from Orange County who opposes the tax, said it was “already a hot mess, no matter what happens.”
Federal lawsuit challenges Regan’s campaign offer
Regan, president of the Service Employees International Union-United Healthcare Workers that placed the wealth-tax measure on the ballot, tried to bring the California Primary Care Association, which represents hundreds of health clinics, into the campaign, according to a federal lawsuit filed last month. The association and several health clinics sued Regan and his union, alleging that Regan offered through an intermediary to withdraw a separate ballot proposal governing how clinics spend their budgets if the association dropped its opposition and used its campaign money to support the union. “It’s a shakedown,” association CEO Francisco Silva said. The association had raised about $30 million to oppose the wealth tax and maintained its opposition. A spokesman for the healthcare-worker union called the allegations “categorically false.”
SEIU California disputes over wealth-tax campaign
Regan and his union also disputed decisions by SEIU California, their statewide coordinating organization. SEIU California comprises 17 unions representing more than one million workers, including the 120,000 in Regan’s healthcare-worker union. Its executive committee had agreed to work with other unions on the teachers-backed income-tax measure for education but voted twice, in August and October 2025, against pursuing new revenue through a 2026 ballot measure, according to people familiar with the situation.
Outside law firms investigate union complaints
Regan did not drop the issue. His later efforts to persuade union colleagues to support the wealth tax prompted complaints alleging that he harassed and threatened to extort them. Two outside law firms investigated the complaints, completing reports this summer that were reviewed by The Wall Street Journal. One report examined a complaint from David Huerta, then-president of SEIU California, who said Regan raised the prospect of a U.S. Department of Labor investigation into alleged governance issues if the executive committee did not back the tax. Regan told investigators that his comment was not a threat. Investigators wrote that they had substantiated Huerta’s allegation.
Another report examined an account from Courtni Pugh, a former SEIU California executive director. Pugh told investigators that Regan kicked in her office door during a 2009 argument, backed her against a bookcase and yelled in her face. A colleague recalled hearing arguing and Pugh sobbing. Regan said the allegation was false at a press conference. He said it began circulating after some union leaders attended a 2025 Christmas party at the governor’s mansion, noting that he had not been invited and was glad he was not. Regan indicated the claim was intended to distract from the wealth-tax debate and said politicians and labor leaders who oppose the tax are playing “an inside game of trading favors” with the governor and wealthy donors.
Pugh is now a political consultant working to defeat the wealth tax. She said Regan’s response was offensive to people he had threatened and that she participated in the investigation “in hopes that no one else would have to endure this kind of treatment from him.”
The second outside investigation examined a complaint from Jess Bartholow, who leads SEIU California’s lobbying team. Bartholow described a March altercation with Regan about how she did her job that ended with him yelling “F— you.” Regan said Bartholow approached him and that the two had a brief, “honest and frank exchange.” Regan has been barred from SEIU California’s offices since the complaint, according to one person familiar with the matter, though he can participate in union meetings by Zoom. Regan and other leaders of his union filed their own complaint with the international level of the SEIU union, complaining of character assassination. Regan’s union said the accusations against him were gathered and disseminated by an SEIU California lawyer who had a conflict with Regan dating back more than a decade about finances and governance. In July, SEIU California’s executive committee voted 11-4 to take a neutral position on the wealth tax.
Ballot measure targets assets amid Medicaid cuts
The Service Employees International Union-United Healthcare Workers began workshopping the tax last year after Trump signed the One Big Beautiful Bill Act. The law will cut federal health care spending by more than $1 trillion nationally over a decade, mostly from Medicaid. Medicaid, the program for low-income Americans, covers more than one-third of Californians and is a major funding source for the state’s health care system. Dave Regan, the healthcare-worker union’s president, said union polling found the simplest option—a wealth tax on billionaires with revenue earmarked for health care—was the most popular among several alternatives considered.
The proposal would base the levy on assets rather than income or real estate. Publicly traded stocks, bonds, private business interests, intellectual property and art would count. A person taxed on $10 billion in assets would owe $500 million. The measure would apply to people who were California residents on Jan. 1, 2026, making it harder for billionaires to avoid the tax by moving elsewhere. If the initiative passes, its retroactivity and other aspects are expected to be tested in court. Proponents say the revenue is necessary to prevent hospital closures, millions of residents losing health coverage and insurance costs from spiking.
Newsom and Democrats split over the tax
The measure has reordered traditional political alliances. A main concern is that it could push wealthy people to leave California, reducing tax receipts over time. Gov. Gavin Newsom, the state’s top Democrat, opposes the measure, saying it could undermine California’s competitiveness, and has argued for a national wealth tax instead. Newsom is finishing his final term in California and is discussing a presidential run in 2028. The Democratic candidate on the ballot to replace him as governor, Xavier Becerra, also opposes the proposal. Newsom faces opposition from leaders of his own party after the California Democratic Party endorsed the tax in a weekend vote in August. Rep. Ro Khanna, a Democrat representing Silicon Valley, supports the measure, while Vermont independent Sen. Bernie Sanders has held rallies in Los Angeles and San Francisco backing it.
Newsom’s disagreement with unions widened as the campaign progressed, even though unions had broadly supported him during nearly eight years in office. At a New York Times event in early December, Newsom said the ballot measure was “not something to be panicked about,” given that “the vast majority of labor…and almost everybody I know” opposed it. Lorena Gonzalez, president of the California Federation of Labor Unions, an umbrella group that later endorsed the wealth tax, called Newsom’s chief of staff and said: “With all due respect to Gavin, he doesn’t speak for unions.”
Regan said Newsom called him to the governor’s Sacramento office before Christmas and agreed with him that the federal Medicaid cuts could cost California up to $25 billion a year. “I don’t have a solution, Dave,” Regan said Newsom told him. Regan also said Newsom asked him to withdraw the measure, and the two men had not met since. The healthcare-worker union later proposed a 2% tax instead, but Newsom rejected that alternative. Regan alleged, “Gavin wants to raise money for his presidential campaign,” implying that Newsom wanted to maintain wealthy donors’ support. A representative for Newsom did not respond to requests for comment.
In June, Newsom told a small gathering before a Y Combinator event that he was mapping out Democratic-aligned groups to oppose the wealth tax, isolate the healthcare-worker union and pressure it to drop the measure, according to people who heard his comments. The two countermeasure initiatives also increased the cost of the union’s petition campaign. Petition signature collectors in California are paid per signature, and the billionaire opposition paid higher rates, pressuring the union to match them. The higher rates drained the union’s campaign cash, but the union collected the 875,000 signatures needed to land on the November ballot.
Labor unions divide over funding and economic risks
Teachers’ unions complained that the proposal would direct 90% of revenue to a special health care account rather than general state funds. Several major unions also worried that the wealth tax could compromise a separate ballot measure making an income tax on high earners permanent to fund education, an initiative backed by the California Teachers Association. Julie Van Winkle, a senior officer of United Teachers Los Angeles, led that union to break with its parent organization and support the wealth tax last month. She also brought the smaller California Federation of Teachers into the coalition. “I don’t want my students to not have healthcare,” Van Winkle said. “I felt like it was my responsibility.”
Planned Parenthood Affiliates of California said the tax was not a long-term funding solution. Dustin Corcoran, chief executive of the California Medical Association, which represents 50,000 physicians, said health care groups were considering longer-term fixes for Medicaid funding, including a ballot measure in 2028. Corcoran called the billionaire tax “one of the worst-drafted ballot measures that I think I’ve ever read,” criticizing its one-time nature and limited spending guardrails.
The San Diego Building Trades Council endorsed the wealth tax, while the statewide construction union sided with the billionaire opposition, citing concerns that wealthy residents could leave California, reducing tax receipts and, in turn, scaling back major projects that employ them. Union ironworkers and pipe fitters, dressed in jeans and work boots, rallied against the tax in early October in 100-degree heat, carrying signs that read “Protect Our Jobs.” Roland Gutierrez of the Sprinkler Fitters Local 709 worried that lawmakers could expand the tax beyond billionaires, potentially reaching ordinary workers’ assets and retirement savings. “We’re a big family—we don’t always see eye to eye with each other,” Gutierrez said of the union split. “It happens.”
Billionaires fund countermeasure campaigns
Google co-founder Sergey Brin spearheaded two countermeasure initiatives that could invalidate the wealth tax. One would prohibit California from taxing wealth altogether. The three initiatives together have spent more than $300 million in campaign contributions, roughly 90% of it aimed at defeating the wealth tax.
Californians have faced a barrage of ads overwhelmingly criticizing the proposed tax. Television spots depict doctors in white coats saying it would force cuts to hospitals and clinics, government bureaucrats inside a Trojan piggy bank and ordinary people warning that politicians could expand the tax to everyone. One ad on Facebook sponsored by a business group reads: “Today, it is forcing billionaires to itemize everything they own. Tomorrow it could be YOU.”
Many of the super-rich worried the measure would be a sure win. “Who wouldn’t want to tax the billionaires?” said tech investor David Friedberg on the popular Silicon Valley podcast “All In.” Cryptocurrency billionaire Chris Larsen told a March political event in Mountain View attended by The Wall Street Journal that leaving California was surrender, not bravery. “What happened to that saying, ‘These colors don’t run?’” Larsen said. He also said tech elites had been “checked out” and “way too weak” in California politics.
Silicon Valley figures strategized in a Signal chat about whether to flee or fight California, and some family offices scrambled to hire political consultants. State tax officials check phone logs, country-club memberships and other records to verify whether wealthy taxpayers who claim to have moved are telling the truth. Brin bought a house on the Nevada side of Lake Tahoe. PayPal co-founder Peter Thiel’s company opened a Miami office. White House tech adviser David Sacks said he had moved to Austin, though his 2025 Christmas card included an artist’s rendering of a San Francisco cable car and the name of his Billionaire’s Row estate. Mark Zuckerberg considered leaving California, but Meta’s board negotiated terms on a share split to help cover a potential tax bill and keep him in the state, according to a regulatory filing last week.