Inside California’s Billionaire Tax Fight and the Wide-Open Governor’s Race

5. The Governorship Race

The fight over the billionaire tax is playing out directly within the crowded 2026 race for governor, serving as a defining wedge issue for a Democratic field seeking to replace Gavin Newsom. The major contenders—which include prominent figures such as Lieutenant Governor Eleni Kounalakis, former State Senate President pro Tempore Toni Atkins, Attorney General Rob Bonta, Superintendent of Public Instruction Tony Thurmond, and former State Controller Betty Yee—find themselves walking a tightrope.

Political Strategy and Voter Sentiment

For the Democratic hopefuls, the politics of the wealth tax are treacherous. On one hand, the SEIU is one of the most powerful political forces in California, capable of deploying massive ground operations and campaign funding. Endorsing the wealth tax is a quick route to securing the populist, progressive base. On the other hand, the candidates are acutely aware of the donor class. The tech sector and venture capital firms that bankroll major statewide campaigns are fiercely opposed to the measure.

Most candidates have opted for cautious, nuanced messaging. They broadly support the concept of making the wealthy pay their fair share but express reservations about the mechanisms of the specific ballot measure, citing concerns over capital flight and legal feasibility. Meanwhile, Republican candidates are leveraging the ballot measure to paint the entire Democratic establishment as anti-business, using the wealth tax as a prime example of regulatory overreach driving job creators out of the state.