Paletta said Prop. 40 could encourage antiwealth and antitech populism
The Wall Street Journal’s Politics newsletter for Oct. 27, written by Washington coverage chief Damian Paletta, described a Senate that appears to be in the balance and previewed the midterm races, rallies and policy briefs. Paletta opened the edition by writing that billionaires are “suddenly everywhere in these midterm elections,” including on the ballot in California, and the newsletter led with the state’s Proposition 40 fight before working through its other items.
Paletta’s assessment of the Senate came with a warning about Senate Majority Leader John Thune, whom Paletta characterized as leading Senate Republicans into an uncertain future. Paletta reported that allies worry that Thune could be blamed by President Trump and others if Democrats win back control in the midterms, and with the Senate appearing to be in the balance, he described Thune’s position as precarious.
President Trump was set to hold two midterm rallies in Texas on Tuesday, the newsletter said, with the first in Port of Corpus Christi at 3 p.m. and the second in Lubbock at 6 p.m.
The newsletter also identified Michigan, Texas, Ohio and Georgia as the states whose election outcomes hold outsize sway in determining whether data-center developers will face significant new restrictions on building.
Democrat James Talarico is running for the U.S. Senate against Republican Ken Paxton in Texas, and the newsletter framed the race as a test of whether Talarico can convince Texas that he is a moderate. Paletta wrote that Talarico is rejecting the progressive label and says his beliefs have not changed, but that Republicans are using his past statements on transgender issues and capitalism to attack him as too far to the left.
A policy brief said Fed Chairman Kevin Warsh wants to stop previewing coming moves, though some colleagues are not following his lead.
Another brief said Israel goes to the polls in its first general election since the Hamas-led attacks of Oct. 7, 2023.
The newsletter scheduled a live Q&A for Oct. 27 from 1 p.m. to 2 p.m. ET, with The Wall Street Journal reporters Eliza Collins and Konrad Putzier set to answer questions about how the economy will influence midterm voters across the country.
California’s ballot measure was the item that opened the newsletter. On Nov. 3, Californians will vote on Proposition 40, which would create a one-time 5% wealth tax on people with a net worth of more than $1 billion. The idea was proposed by a healthcare union to replace Medicaid funding that was lost last year, Paletta wrote, and he warned that if it passes, “there will be A LOT OF LITIGATION”.
Paletta called the proposal “a populist and legislative experiment.” He wrote: “Oftentimes, experiments that begin at the state level will scale out, both to other states but also…eventually…to Washington.”
If Proposition 40 passes, Paletta wrote, it could represent the kind of antiwealth, antitech populism that becomes a dominant force in the 2028 election. Democrats were not the only ones talking about taking a tougher stance on the wealthy in 2028, he said, and some populist Republicans have been criticizing CEO pay and corporate behavior. A strong vote in favor of the tax, albeit in California, could encourage more of that activity, Paletta said.
If the measure is defeated, Paletta wrote, it could create tension between centrist Democrats and the Democratic Socialists of America as they battle for the party’s steering wheel heading into the 2028 campaigns.
Paletta’s account left both outcomes open, tying a California ballot decision to national debates over taxing the wealthy and corporate behavior and to the Democrats’ internal contest, while his framing of state-level experiments scaling upward placed the measure’s consequences beyond the state.
Paletta identified himself as The Wall Street Journal’s Washington coverage chief and said he has covered Washington for 22 years as a reporter and editor, including the White House, Congress, national security, the federal budget, economics and multiple market meltdowns. The edition was curated and edited in collaboration with Alistair Dawber and Alina Heineke.