SEATTLE and LOS ANGELES—With apologies to Charles Dickens, the battle over taxing millionaires and billionaires in Washington state and California is “The tale of two states.”
That’s because while billionaires and millionaires are unified against popular efforts to tax their immense wealth, unions in Washington state support such a tax, while California unions are split. In some cases, big union locals support the tax, while state federations oppose it.
Or sometimes it’s the other way around.
And just as unions are split in California, so are voters in both states. Public opinion polls in California give a muddled result, but within the margin of error. Whether the wealth tax there wins or loses almost depends on how the question is worded by canvassers.
In Washington state, unions are unified in support of the wealth tax, which the legislature approved earlier this year, and against its repeal. But the voters, blitzed by millions of dollars in ads from the 1%, have been drifting away since early summer. The question is becoming whether they’ll drift far enough—prodded by a scare campaign telling middle-class voters the tax could apply to them—to side with the ultra-rich.
On its face, taxing the enormous wealth of the nation’s billionaires is a great idea, with people believing the ultra-rich should pay their fair share. It has the unreserved support of Sen. Bernie Sanders, Ind-Vt., Congress’s long-serving supporter of workers. He’s been pounding away at the 1%—and now the 0.00001%—ever since he entered Congress.
Sanders campaigned in California on October 5 for Proposition 40, which would impose a one-time 5% surtax on the assets of the state’s millionaires and billionaires and devote the proceeds, an estimated $100 billion yearly over five years, to health care. He summarized his speech in a tweet:
“The level of income and wealth inequality in the U.S. is beyond insane. The top 0.00001%, just 20 households, now own over $4 trillion—more than 12 times the wealth of the bottom 50% COMBINED. We must defeat oligarchy. Billionaire wealth tax NOW,” Sanders declared.
Proposition 40’s proceeds, union supporters say, would replace money California will lose due to Medicaid cuts in last year’s Donald-Trump-GOP “Big Beautiful Bill.” The money “saved,” at least $800 billion nationwide over a decade, would go for yet another tax cut for the ultra-rich.
Those Medicaid cuts are supposed to kick in after the November 3 election. But the rich—and California hospitals—already anticipate the impact. Hospitals are cutting services and staff.
The rich are salivating and pumping money into defeating the Prop 40 wealth tax in California and passage of Initiative 645, repealing Washington state’s higher, permanent wealth tax.
The catch in California is that not all unions or union federations back the wealth tax. National Nurses United does. The SEIU-United Healthcare Workers does. The largest Teachers/AFT local in the state, the United Teachers of Los Angeles, does. So do the United Educators of San Francisco, also an AFT local. And so does AFT’s statewide council, although its support came late in the campaign.
The Labor Federation of California, the state’s AFL-CIO, supports Prop 40’s wealth tax, too, despite internal flak between unions about it. Federation President Lorena Gonzalez, a former state legislator and executive director of the San Diego-Imperial County Central Labor Council, said the state fed came around due to rank-and-file members. As more of them learned about the wealth tax, more supported it and made their voices heard, she told the Standard.
“The facts are simple: The billionaires think people are stupid,” SEIU-United Healthcare Workers Vice President Debru Carthan posted on the union website, arguing for Prop 40. “They got big tax breaks. Californians got big healthcare cuts.”
“The billionaires pay lower tax rates than the rest of us and are willing to do almost anything to avoid paying their fair share. They’ve been spending tens of millions of dollars on deceptive ads flooding voters’ screens…The billionaires are trying to play us all, but we’re not falling for it. We’re moving full steam ahead on our fight for all Californians to have good, affordable healthcare. Tax the billionaires. Save lives. Vote Yes on Prop 40.”
The California Teachers Association, the state’s National Education Association affiliate, opposes Prop 40. Realizing opposition without an alternative would look bad, it backs Proposition 3 to permanently extend California’s 15-year-old surtax on the rich, scheduled to expire in 2031. Prop 3 would tax people with incomes over $371,000, plus yearly adjustments for inflation.
The state Building and Construction Trades Council opposes Prop 40, saying it would drive the wealthy —and the money they invest in construction—out of the state. “The majority of our members are not revolting on this. The majority of our members are ‘no’ on 40,” Building Trades President Chris Hannan told The Standard, an alternative publication.
One dissenter from the Building Trades’ stand is Sheet Metal Workers Local 104, based in the Bay Area city of Livermore. Another is the San Diego Building and Construction Trades Council.
The billionaire tax “dedicates 90% of its revenue to health care,” Local 104 said in its endorsement list on its website. “We support protecting access to care and the facilities our members build and maintain, without shifting this tax onto working families.”
Hannan’s reply to that was a verbal shoulder shrug: “A few locals see it differently—those things happen.”
Teamsters California, which includes Joint Council 42 in the south and Joint Council 7 in the north, backs the billionaires tax.
“We have a chance to save lives and tax billionaires this November,” Teamsters California posted. “Prop 40 is a lifeline for millions of working families across California. Prop 40 will fill the $100 billion funding gap caused by cuts from the federal government to our state’s healthcare.”
“Prop 40 will prevent working people from losing healthcare and will stop massive closures and cuts to hospitals and clinics in our communities. Vote Yes on Prop 40” and no on two other corporate-funded alternatives. The Southern California Teamsters also support Proposition 3.
“Proposition 3 would permanently continue the existing tax on California’s 2% wealthiest residents—which generates billions of dollars every year directly for classroom and instructional needs, including educator salaries. If Prop 3 isn’t passed this year, the Los Angeles Unified School District could stand to lose close to $839 million annually,” the California Teachers Association warned.
“We endorsed YES on Prop 3 to fight back potential losses to public education funding…Prop 3 is the first step to protecting the funding we have and setting up to fight for more.”
No wonder the polls are close and the voters—if they haven’t cast ballots already—may be confused.
The situation is clearer in Washington state, which depends on sales taxes and business operations taxes for most of its revenue. Sales taxes disproportionately hit low-wage and middle-income people.
So the legislature decided to try to make the state’s tax system at least a little fairer by enacting a 9.9% wealth tax on millionaires and billionaires. Unions enthusiastically backed the idea. The rich haven’t, and I-645—to repeal it—is the result.
But in Washington state, unions, civic groups and progressive allies are all against I-645.
The billionaires warn that not only will the wealth tax eventually fall on the middle class and working class, but that it’ll tax their pensions, too. Washington State unionists reply that’s a lie. But the scare campaign has cut support for taxing the rich.
“Working families are maxed out. It’s time to tax the rich,” state Labor Council President April Sims said in The Stand, the council’s daily news website. It’s especially relevant, Sims added, because Washington has no income tax.
“The rich are getting richer, working families are struggling, and our tax code is a dysfunctional relic of a past century and a far different economy,” Sims says. “We are left with a choice. We can raise taxes once again on working families” by increasing sales taxes. “We can slash billions from programs that feed kids and help families afford doctors’ visits.”
“Or we can tax the rich to fund essential services like education, nutrition, child care, and health care.”
“Working families have no more to give. Kids need to eat. We owe every child equal access to education. The only moral choice is to tax the rich. This isn’t fringe, and it isn’t radical. Millionaires pay taxes on their income in 41 states. Most Washington voters support a tax on the highest earners in this state in order to fund education, health care, and child care for working families.”
“Taxing the rich is popular because it’s a straightforward question of fairness. Working families pay our taxes to support the state we all love. It’s time the wealthiest among us paid their fair share.”
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