California Union Leader Pushes Billionaire Wealth Tax
(Bloomberg) — The man behind the California effort to impose a first-in-the-nation tax on billionaires knows it’s a Hail Mary. But even if it fails, he’s not stopping.
Dave Regan, the head of the union leading the ballot measure, says taxing wealth is the only way to cover roughly $100 billion in federal healthcare funding he says California will lose over the coming years after cuts made under the Trump administration. Despite opposition from some of the world’s richest people, as well as Governor Gavin Newsom and his likely successor Xavier Becerra, Regan sees Proposition 40 as not only winnable, but a potential springboard for wealth-tax campaigns across the country.
“We understand we’re the underdog,” Regan said in an interview at Bloomberg’s San Francisco office. “I think we’ve made a lot of headway, and I think we’ve made this issue inevitable.”
With four weeks until Election Day, Regan and his healthcare-workers union are in the final stretch of a campaign to persuade Californians to embrace the tax, enlisting allies like Senator Bernie Sanders and mobilizing members across the state. Polls show an extremely tight contest, and opponents including Newsom, unions and business groups argue the one-time tax is poorly designed, unnecessary and risks driving wealthy residents — and their tax dollars — out of the state.
Billionaire Google co-founder Sergey Brin has been among the fiercest adversaries, pouring over $100 million into a political influence machine that’s mostly fighting the tax, with an ad barrage expected to hit voters in the coming weeks across TV, social media and the mail. Brin is also propping up two other ballot measures that could undercut the billionaire tax even if it passes.
“They’re going to carpet-bomb us,” Regan said. “There’s no question about that.”
Sanders Rally
Supporters are trying to meet the wall of money with a show of political force. On Saturday, the Vermont Senator took the stage at San Francisco’s Curran Theatre to rally more than 1,600 people around what he called “the most important ballot initiative in the country.”
Joined by state insurance commissioner candidate Jane Kim and Silicon Valley Congressman Ro Khanna, Sanders cast the California campaign as part of a broader progressive fight over extreme wealth and the political power of billionaires.
“The whole country and frankly people around the world are paying attention to what is happening here,” Sanders said. “Even with all their money and all their power, the people united are going to beat them.”
Regan has taken that effort further than most. The 60-year-old union leader has helped turn a wealth tax long-pursued by progressives into a real choice before voters in the nation’s most populous state.
And he is already looking elsewhere. Regan says he has fielded interest from people in roughly two dozen other states that, like California, allow citizens to put initiatives before voters.
“When you look at billionaire wealth, it’s first California, but there’s also Florida,” Regan said. “We would love to do this in Florida in 2028.”
Death Star
First, he’ll have to persuade Californians that the proposed wealth tax won’t cause more harm than good.
The Proposition 40 campaign argues taxing the rich is the only realistic way of averting cuts that could leave millions without medical coverage, eliminate tens of thousands of healthcare jobs and force clinics to close.
“We know for sure, beyond a shadow of a doubt, lives will be lost if Prop 40 does not pass,” said SEIU-UHW Vice President Debru Carthan.
Regan has put the threat in more cinematic terms. At a recent conference of roughly 2,000 union members, he warned a “healthcare Death Star” is heading toward California, casting his union colleagues as characters in Star Wars’ Rebel Alliance. He’s also framed the tax as an “enormous moral choice” facing Californians.
Opponents of the tax dispute the scale of the looming healthcare shortfall and argue Proposition 40 could inflict lasting economic damage by driving wealthy residents, entrepreneurs and investment out of California.
Regan and his allies are simply “manufacturing a crisis in order to create a new tax,” said Rob Lapsley, president of the California Business Roundtable, a nonpartisan group of executives that opposes the tax. Lapsley says the eventual windfall from Anthropic PBC’s initial public offering and other AI-company IPOs could help offset funding losses that he expects would be far smaller than what Regan projects.
Read More: Billionaire Tax Divides California Industry It’s Meant to Help
Lost Fights
Proposition 40 has also put Regan’s own record under scrutiny.
Regan grew up in working-class family in Buffalo, New York, as the city was hollowed out by the decline in American manufacturing. After graduating from Cornell in the 1980s, he went straight into the bare-knuckled world of organized labor. For the past 15 years, he has led SEIU-UHW as an aggressive operator willing take fights directly to voters.
Regan’s union successfully pushed for a ballot measure in 2016 that would increase California’s minimum wage, forcing lawmakers into a deal. More recently, for three straight elections, Regan backed — and lost — initiatives that sought to impose new requirements for kidney dialysis clinics.
“He’s taken on a big fight, and he doesn’t have a lot of history of actually winning campaigns,” said Brandon Castillo, a ballot-measure strategist who faced Regan in the dialysis fights.
This time, Regan’s adversaries are considerably wealthier.
A group of billionaires that includes Brin, the world’s fourth-richest person according to the Bloomberg Billionaires Index, as well as former Google Chief Executive Office Eric Schmidt and Ripple co-founder Chris Larsen, has helped bankroll around $80 million in ads to defeat Proposition 40. Their spending is also supporting Proposition 41 and 42, which could nullify the wealth tax if they pass with more votes.
Assault Allegations
Regan has also been accused of intimidating women who worked within SEIU, allegations detailed in investigative reports commissioned by SEIU International and its California council that were first reported by The Los Angeles Times and also reviewed by Bloomberg News. Some of the incidents date back more than 15 years and include an allegation that Regan physically intimidated a female SEIU leader, and other accounts of aggressive behavior toward women.
Regan denied the physically intimidating behavior allegation and said they are part of a “shoot-the-messenger campaign” to discredit Proposition 40.
“Unrelated verbal interactions spanning nearly two decades are being stitched together and stripped of context to manufacture a false narrative about the union’s leadership,” SEIU-UHW said in a statement.
Grassroots Organizing
With the election closing in, Regan is betting grassroots organizing can help offset his enormous financial disadvantage.
He has asked supporters to blast their contacts with texts, is counting on endorsements from figures like Sanders to amplify his reach and believes growing resentment against Big Tech and billionaires creates favorable conditions for the proposal.
California’s costly media market, however, makes it hard to compete with a billionaire-backed advertising blitz. And Sanders has endorsed at least a half-dozen ballot measures in the state in recent years that failed, including proposals on rent control, affirmative action and property-tax reform.
Regan knows it might not be enough to win this time.
And already, he’s plotting a comeback.
“I think we’d go back to the ballot in 2028,” he said.
