San Francisco Democrats break with their party over the billionaire tax—and reveal how deeply Prop 40 has split the left

Nothing has the Democratic Party more split than taxing billionaires.

San Francisco Democrats have broken with their statewide party over California’s proposed billionaire wealth tax, rejecting Proposition 40 in a lopsided vote that exposes a growing divide over whether taxing extreme wealth is worth the potential economic consequences.

The San Francisco Democratic Party voted 17-4 to oppose Proposition 40—with five members abstaining, five members absent, and one member with no endorsement.

Nancy Pelosi chose not to endorse the measure.

This comes just weeks after the California Democratic Party endorsed the measure in August after a contentious vote that succeeded above the 60% threshold.

California already depends heavily on wealthy residents for tax revenue, and a tax that encourages a portion of them to leave could undermine the state’s existing revenue base—and poses a consequential idea in San Francisco, where the technology industry has produced a large concentration of founders, investors and executives whose wealth has amassed in stock rather than cash.

Six billionaires have already ended their California residency ahead of the January 1 deadline.

“A unique feature of these 10b startups is that even if they raise a billion, little, if any of that money goes to the founders, who are now worth billions of dollars overnight,” Mark Cuban wrote on X regarding how the billionaire tax would affect startups in California.

“They are the definition of cash poor, stock rich.” Proposition 40 would impose a one-time tax of 5% on the net worth of people who were California residents on January 1, 2026, with more than $1 billion in assets.

About 200 billionaires would be affected by this proposal—and they hold over $2 trillion in total assets.

Taxpayers could spread their payments over five years, although doing so would cost more.

Ninety percent of the resulting revenue would be directed toward healthcare services.

The state’s Legislative Analyst’s Office estimates the measure could generate tens of billions of dollars in temporary revenue over several years.

“This temporary increase in state tax collections would be spread across several years.