California Billionaire Tax Proposal Divides Democratic Leaders

Bernie Sanders and Gavin Newsom clash over plan to tax state's wealthiest residents

Published on Feb. 23, 2026

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A California proposal to impose a 5% tax on the assets of billionaires is creating a rift between prominent Democrats, including Vermont Senator Bernie Sanders and California Governor Gavin Newsom. Sanders is campaigning in support of the measure, which aims to backfill federal funding cuts to health services, while Newsom warns it could damage the state's finances and competitiveness. The debate is unfolding as voters in both parties express unease with economic conditions and the future.

Why it matters

The billionaire tax proposal has become a flashpoint between the Democratic party's progressive and moderate wings, just as the party seeks a unifying message ahead of the midterm elections. The outcome could impact California's fiscal health and the national political landscape.

The details

The proposal, backed by a large health care union, would impose a one-time 5% tax on the assets of California's billionaires, including stocks, art, businesses, and intellectual property. Sanders has voiced strong support, calling it a template for other states, while Newsom warns it could lead to an exodus of billionaires and a loss of hundreds of millions in tax revenue for the state.

  • Sanders is campaigning for the proposal in Los Angeles on Wednesday, February 19, 2026.
  • The state Democratic convention is scheduled for this weekend.

The players

Bernie Sanders

A Vermont senator and democratic socialist who is popular in California and has railed against wealthy elites and income inequality.

Gavin Newsom

The Democratic governor of California who is outspokenly opposed to the billionaire tax proposal, warning it could damage the state's finances and competitiveness.

Brian Brokaw

A longtime Newsom adviser who is leading a political committee opposing the tax proposal.

Chad Bianco

A Republican candidate for California governor who has warned the tax would erase jobs.

Matt Mahan

A Democratic candidate for California governor who has said inequality starts at the federal level, where the tax code is riddled with loopholes.

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What they’re saying

“Our nation will not thrive when so few own so much.”

— Bernie Sanders (X)

“The issues that are really going to be motivating Democrats this year, affordability and the cost of health care and cuts to schools, none of these would be fixed by this proposal. If fact, they would be made worse.”

— Brian Brokaw, Newsom adviser

What’s next

The proposal must gather more than 870,000 petition signatures to make the ballot in California. Opponents are sending targeted emails and social media ads to sway party insiders ahead of the state Democratic convention this weekend.

The takeaway

The billionaire tax proposal has become a divisive issue within the Democratic party, pitting progressives like Bernie Sanders against moderates like Gavin Newsom. The outcome could have significant implications for California's fiscal health and the national political landscape heading into the midterm elections.