California labor union offers to scale back billionaire tax proposal after pushback
Summary
A California labor union proposed a one-time 5% tax on billionaires but scaled it back to 2% after facing strong opposition, including from Governor Gavin Newsom. The labor union wants the Legislature to pass the smaller tax, while critics worry the tax could harm the state’s economy and public services.Key Facts
- The proposal aims to tax individuals worth more than $1 billion who live in California as of January 1, 2026.
- The original tax rate was 5%, now lowered to 2% in an offer to gain political support.
- The tax is expected to raise $100 billion, mainly to offset federal healthcare cuts and fund food assistance and education.
- Governor Newsom opposes the measure, saying it could reduce money for teachers, schools, clinics, and public safety.
- Over 875,000 signatures were collected to qualify the original proposal for the November ballot.
- Critics argue the tax could push wealthy residents to leave California, reducing overall state tax revenue.
- Prominent progressives support the tax, while major unions, tech leaders, and medical and school groups oppose it.
- The proposal comes as California debates how to respond to changes in federal tax and spending policies signed by President Donald Trump.
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