The campaign to tax California‘s wealthiest residents suffered a significant setback this week when the state’s most influential labor coalition declined to endorse the measure. The proposal, spearheaded by a coalition of grassroots labor organizers, would have imposed an additional 1.5% annual tax on fortunes exceeding $1 billion.
The rebuff came from the California Labor Federation, a powerful umbrella group representing over 1,200 affiliated unions. In a closed-door meeting on Tuesday, federation delegates voted 42 to 11 to remain neutral on the initiative, effectively denying it the organizational muscle needed to qualify for the 2028 ballot.
Organizers had hoped the federation’s endorsement would provide a wave of volunteers and crucial early funding. Instead, they faced a muted response. Sarah Chen, a nurse and lead organizer for the Tax Billionaires Now coalition, expressed frustration. “We thought the union movement would stand with working families against the outrageous concentration of wealth, but leadership caved to pressure from wealthy donors,” she said.
The federation’s president, Miguel Santos, offered a different explanation. “Our mission is to protect workers, but we have to be strategic. Pushing an untested tax scheme could jeopardize housing and healthcare ballot measures we’re already championing,” Santos said in a prepared statement. “We’re not opposed to the concept; we’re opposed to the timing and the narrow focus.”
The initiative itself is straightforward. It would create a new bracket for billionaires, with revenues earmarked for public education and universal pre-kindergarten. Proponents argue that California, home to nearly 200 billionaires, could generate $25 billion annually to lift struggling families.
But critics within the labor movement worry about unintended consequences. Some unions rely on donations from wealthy individuals and businesses. Others fear a backlash from the tech sector, which has traditionally funded progressive causes. The state’s enormous budget surplus has also cooled the urgency for new taxes, even as homelessness and inequality persist.
The split highlights a growing divide between established labor institutions and younger, more militant organizing campaigns. While the federation’s neutrality stings, it does not kill the measure. Under state law, proponents can still gather the roughly 900,000 signatures needed to place the tax on the ballot. The Tax Billionaires Now coalition says it will press forward, relying on small-dollar donors and a network of volunteers.
“We’ve been counted out before,” Chen said, her voice carrying a mix of determination and weariness. “Wall Street and the billionaire class can throw millions against us, but we have people power.”
The next decision point comes in August, when the coalition must submit the first batch of signatures to county election officials. For now, the political landscape remains uncertain, and the billionaires in question remain silent.
The state’s nonpartisan legislative analyst has not yet released a fiscal review, but both sides are already spinning expectations. Supporters call it an overdue step toward economic justice; opponents brand it a punitive measure that could drive businesses out of California.
What is clear is that the road to the 2028 ballot will be long and contentious. The parent union’s rebuff has left the organizers bruised but not broken, and the fight over taxing California’s richest is far from over.