A new rivalry has arisen between two of the Left’s largest players — and whenever the Left is feuding, it’s fun to watch. On Feb. 18, Sen. Bernie Sanders (I-VT) held a rally in Los Angeles to support a tax initiative called The Billionaire Tax Act, which targets over 200 billionaires who live in the state. Gov. Gavin Newsom (D-CA) has openly opposed the bill, claiming it would do more harm than good to the world’s fourth-largest economy. Newsom expressed concern that wealthy residents would likely move out of the state, damaging the overall economy and future tax revenue.
Sanders argued that the “billionaire class no longer sees itself as part of American society,” suggesting that modern wealth has created a new era of isolation.
“They see themselves as something separate and apart, like the oligarchs of the 18th Century, the kings and the queens and the czars,” the Vermont Independent said. “They believe they have the divine right to rule and are no longer subject to democratic governance.”
Under the proposed initiative, billionaires would face a one-time 5% tax on their total net worth. For a single billionaire, this would amount to a $50 million tax bill for every $1 billion owned. The goal of the bill is to raise $100 million to support the current healthcare, education, and food assistance cuts imposed by President Donald Trump’s The One, Big, Beautiful Act, signed July 4, 2025.
Section 3(b) of the Billionaire Tax Act states:
“The Act raises funding for health care, education, and food assistance by imposing a narrowly applicable, one-time tax that is administratively feasible and efficient to enforce against all billionaires in the State”.
While the majority of the funds would go to the healthcare system and the rest to the education system — with the split being 90% to the Billionaire Tax Health Account and 10% to the Billionaire Tax Education and Food Assistance Account — the allocation tracks perfectly with the bill’s financial backers. The Service Employees International Union-United Healthcare Workers West is the primary organization funding and proposing the 2026 California Billionaire Tax Act. It’s no wonder that they are trying to push forward a bill that benefits them.
Newsom’s view seems to be driven by the state’s interest. He has made several comments on the subject, but more recently, in a statement he made, Newsom said: “Over the years, you would see a significant reduction in taxes because taxpayers will move. And that is what I fear at a state level.”
Newsom is correct. There would be a drastic impact on the economy if those taxpayers were to leave the state. California is home to around 200 billionaires. Those in the top 1% of earners in the state accounted for over 38.7% of total state income tax revenues. This bill would drive the wealth out of the state, resulting in large amounts of consistent tax revenue that would be lost. It would not be hard for these extremely wealthy individuals to relocate to a state with more favorable tax conditions, such as Florida or Texas.
There’s no question that California is going to lose a lot of money and funding as a result of the One Big Beautiful Bill Act, signed by President Donald Trump. The Golden State is projected to lose roughly $30 billion in medicaid funding, and Sanders, a self-proclaimed democratic socialist, is known for attacking the elite class or the top 1% of earners in our nation. This partly answers the question of what exactly a senator from Vermont is doing rallying in Los Angeles.
The 83-year-old is not looking to run for president for a third time. Rather, he is likely seeking to set a national precedent and take a stand against the “ruling class” he believes has abandoned this country. Though that same class is responsible for contributing to 40.4% of all federal income taxes in 2022, according to the federal tax foundation, that’s not enough for Sanders.
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In reality, Sanders is just using this opportunity as a national “beta test” for wealth taxes. It seems that Sanders views the California Billionaire Tax Act as a template for the rest of the country.
If successful, he will use the political momentum gained in the world’s fourth-largest economy to reintroduce a national wealth tax in Congress. For him, this is the test run he’s been looking for, where he can prove that taxing assets rather than just the income is both favored and operational.