The union behind California’s billionaire tax is blinking, but Gavin Newsom wants to inflict total defeat

A labor union behind a controversial tax on California billionaires significantly scaled back its proposal a day after it qualified for the November ballot, but the offer Thursday wasn’t enough to get the governor on board. The proposal from the Service Employees International Union Healthcare Workers West to impose a one-time, 5% tax on individuals whose net worth exceeds $1 billion faces staunch pushback from a wide swath of critics, including Democratic Gov. Gavin Newsom. The union said Thursday that it would abandon the 5% tax proposal if Newsom would join them in supporting a 2% levy. The updated proposal would instead have to be passed by the Legislature, given a June 25 deadline for the measure to qualify for the ballot. Tara Gallegos, a spokesperson for Newsom, said scaling it back doesn’t change its “fundamental flaws that harm working Californians.” “The Governor supports making the wealthiest Americans pay their fair share, but this poorly designed state-only measure will defund teachers, schools, clinics, and public safety,” she said in a statement. The tax, to be paid by those living in the state as of Jan. 1, 2026, is meant to generate $100 billion in revenue, mainly to counter federal cuts to healthcare for low-income people with some money going to food assistance and education programs. “A 2% one-time tax on that accumulated wealth is modest by any objective measure especially if it means keeping emergency rooms open and saving patient lives,” backers wrote in a letter to Newsom. Secretary of State Shirley Weber, a Democrat, said Wednesday night that petitioners collected more than the roughly 875,000 signatures needed to place the original proposal before voters. States have been debating how to respond to the major tax breaks and spending cuts legislation President Donald Trump signed last year. The proposal has already divided Democrats and major labor unions and triggered an expensive campaign to defeat it. The proposed tax is backed