California’s proposed billionaire tax brings Sen. Bernie Sanders to rally in LA

Politicians and state leaders from the world’s fourth-largest economy like to say, “As goes California, so goes the nation.”

Perhaps that is why a proposed wealth tax on billionaires that could end up on the November statewide ballot is not only being watched closely nationwide, but one of the country’s most progressive U.S. senators — who lives thousands of miles away — is actively campaigning for its passage.

Sen. Bernie Sanders, an independent from Vermont who previously said he wants to introduce a national wealth tax, headlined a campaign kickoff rally for the proposed tax in Los Angeles on Wednesday, Feb. 18.

Read more: California’s politicians and ultra-wealthy are divided over a proposed billionaire tax

In a roughly 30-minute speech, Sanders told a packed crowd at the historic Wiltern theater in L.A.’s Koreatown that the rally and proposed wealth tax were more than simply about economics and tax policy.

At its core, he said, the issue was about letting billionaires know that the real power still lies with the American people.

“We’ve got some bad news for them — starting right here in California,” Sanders said as the crowd erupted into cheers and applause. “These billionaires are going to learn that we are still living in a democratic society where the people have the power.”

The proposed tax is spearheaded by the Service Employees International Union-United Healthcare Workers West to prop up California’s health care system following federal funding cuts under the Trump administration.

Sanders’ decision to wade into the debate signals how the controversial tax proposal is figuring into national conversations about whether the ultra-wealthy should pay more to support government services, including to keep social safety nets from collapsing.

At the same time, the support of the proposed ballot initiative from Sanders, a former presidential contender, puts him at odds with Gov. Gavin Newsom, a potential 2028 presidential hopeful who has raised concerns that the tax would drive California’s wealthiest to move — which in turn could mean a loss of income tax and economic and innovative output for the state.

Proponents say a one-time wealth tax of up to 5% on individuals and trusts with assets worth more than $1 billion would help backfill federal funding cuts to health care as a result of President Donald Trump‘s so-called “Big Beautiful Bill,” the massive tax and spending cuts bill that Trump signed in July.

They say the state’s wealthiest have benefited from major tax breaks and that it’s only right for them to pay to prop up the health care system.

The proposed wealth tax, which sponsors of the initiative estimate would apply to about 200 billionaires, would generate $100 billion for the state and save California’s health care system from collapsing by keeping hospital emergency rooms, clinics, nursing homes and other health care facilities open; keeping health care workers employed; and stabilizing health insurance coverage and premiums for Californians, proponents say.

According to SEIU-UHWW, nearly 15 million low-income Californians, including more than half the state’s children and 2.2 million seniors and individuals with disabilities, rely on Medi-Cal, which stands to lose over $19 billion annually in federal funding.

Ninety percent of the revenue from the wealth tax would pay for health care, with the remaining 10% earmarked for education and food assistance programs.

“If we don’t act, we are going to see patients suffer,” Suzanne Jimenez, chief of staff at SEIU-UHWW, said on stage.

“If we don’t act,” she added, “our friends and our families will have to drive twice as far, will have to wait twice as long for the life-saving care that they’re going to need. And for what? So that billionaires can own another yacht?”

Sanders’ appearance at Wednesday’s rally — where some in the enthusiastic crowd waved signs that read “Stop the Healthcare Collapse” — was an opportunity for SEIU-UHWW to build momentum for its campaign and gather more signatures. Supporters of the wealth tax need to collect nearly 875,000 valid signatures from registered voters by June 24 to qualify it for the November ballot.

The rally also featured remarks by union members from UNITE HERE Local 11 and Teamsters Local 1932. Rage Against the Machine guitarist Tom Morello performed a series of songs before Sanders took the stage.

Opponents of the proposed tax, meanwhile, are working to thwart the efforts of the billionaire tax campaign.

Three other ballot initiatives are being floated that could invalidate the billionaire tax proposal or even keep it off the ballot altogether. Some of those counter-efforts are well-funded and backed by wealthy tech entrepreneurs.

For example, Stop the Squeeze, a committee working to defeat the proposal, on its website described the proposed billionaire tax as “full of unintended consequences” and urged voters to “join Governor Gavin Newsom” and others in rejecting the initiative. The committee’s top funders include investor Daniel Tierney and venture capitalist Ron Conway.

The California Business Roundtable also opposes the proposed wealth tax. Rob Lapsley, the organization’s president, called it “a tax no one can afford.” When entrepreneurs or other high earners leave the state, it translates to fewer jobs, less investments and a weaker tax base, he said.

“Bernie Sanders flew in from Washington to lecture Californians about how to run our economy — and he’s bringing the same out-of-touch playbook that’s already made our budget dangerously volatile and dependent on a shrinking handful of taxpayers, while driving up the cost of living for all California residents,” Lapsley said in a statement.

Supporters of the billionaire tax proposal, meanwhile, are bracing for a fight at the ballot box.

Our Revolution, which bills itself as the nation’s largest grassroots independent political organizing group and advocates for progressive policies, announced Wednesday it plans to mobilize its 1.2 million contacts in California and partner with allied groups “to build a broad, statewide signature collection infrastructure.”

“Wealth inequality and corporate corruption are the defining issues in our democracy, and our base knows it,” Joseph Geevarghese, executive director of Our Revolution, said in a statement.

“The California Billionaires Tax Act is about shifting power away from oligarchs and toward working families,” he added. “Leaders like Bernie Sanders are barnstorming the state because this fight matters.”

Despite Sanders’ popularity in California — he won a plurality of the votes in this state during the 2020 primary presidential elections — at least one political observer isn’t so sure that the opinion of an out-of-state politician, even one with Sanders’ political cachet among progressives, will hold enough sway to affect the outcome at the ballot box.

Veteran Democratic political consultant Garry South noted that in 2016, the campaign for a prescription pricing ballot initiative had Sanders fly out to endorse Proposition 61, yet it still failed.

“Gavin Newsom ultimately will have far more to do with the outcome than Bernie Sanders,” South said.

He added: “I just don’t think Californians are particularly prone to listen to what some out-of-stater has to say about a ballot measure that affects only California.”

Meanwhile, back at The Wiltern on Wednesday night, Sanders roused the crowd to its feet as he told them they could set the example for standing up to the rich and powerful.

“The people in California can show the people of America, and in fact people throughout the world, that when we stand together, we can take on the oligarchs and the billionaires,” Sanders said.

“Let’s go forward together. Let’s win this thing,” he said as he walked off the stage to John Lennon’s “Power to the People.”

Sanders’ trip out west is part of a multi-day tour through the state.

His schedule includes meetings with leaders from the artificial intelligence industry. Sanders also plans to appear at a Friday town hall in the Bay Area with Rep. Ro Khanna, a Democrat from Silicon Valley, to discuss the future of AI.