San Francisco Dems Poised To Oppose State Billionaire Tax

Democratic Party leaders in San Francisco are poised to vote next week to oppose a tax on California billionaires, a striking rebuke of the progressive ballot measure in this heavily Democratic city.

Instead, local party officials told POLITICO they will put forward a competing resolution calling for a national wealth tax, putting the party in line with establishment figures like Gov. Gavin Newsom, who argues a state-level tax would harm California’s tech-powered economy.

The wealth tax, which has drawn national attention and millions of dollars in opposition from tech titans like Google co-founder Sergey Brin, was narrowly endorsed by the state Democratic Party earlier this month. But opposition in San Francisco, once a bastion of leftist politics, is a warning sign for progressives supporting the measure.

Progressive ballot measures in California typically need to win by a wide margin in liberal coastal population centers like San Francisco to achieve a majority statewide. And the city, while still overwhelmingly Democratic, has shifted toward the political center in recent years.

“We tend to be at the bleeding edge, and we saw a lot of the negatives of some more extreme policies earlier than most,” Eric Kingsbury, vice chair of the San Francisco County Democratic Party, told Playbook. “As AOC likes to say, ‘Woke 1.0 was crazy,' and we saw some of that really peak and the tides start to recede before (other blue cities)."

Kingsbury, who co-authored the resolution calling for a national wealth tax, is part of the moderate majority that now runs the county party. Moderate Democrats in San Francisco, including Mayor Daniel Lurie — also an opponent of the billionaire tax — ascended amid a post-pandemic voter backlash fueled by frustration over homelessness, crime and shuttered public schools. Progressive forces, who previously dominated much of the local political scene, have faltered in election after election over the last four years.

In the most recent warning sign for supporters of the billionaire tax measure, voters in San Francisco overwhelmingly rejected a local union-backed proposal to raise taxes on larger corporations with “overpaid CEOs” in the June primary.

Leaders of the county Democratic Party will vote on their Prop 40 opposition — and the competing resolution — at a meeting on Wednesday. The outcome appears all but certain given the local party’s moderate bent and previous opposition to the “overpaid CEO” tax hike.

Progressive supporters of the measure are already dismissing the outcome, Suzanne Jimenez, chief of staff at SEIU-UHW, the lead union behind Prop 40, said opposition from local party leaders "has no bearing” on the statewide picture.

“Frankly, it is irrelevant that about a dozen regional party bureaucrats, many of whom have business ties to billionaires, have scheduled this performative vote as a favor to big business interests,” she said.

But if the party in San Francisco votes as expected, it will illustrate a stark contrast with the California Democratic Party, whose vote to back the tax was heavily influenced by Los Angeles powerbrokers like Rep. Maxine Waters and labor leaders. Typically, county party leaders don’t break from the statewide party on ballot measure endorsements. But leaders of the San Francisco party took an exceptional step earlier this summer when they voted to change their bylaws to allow a vote on the tax measure.

Nancy Tung, a moderate Democrat and chair of the San Francisco party, led that effort to change the local bylaws after voting against endorsing Prop 40 at the state convention. She added, “A one-time billionaire tax does not solve our long-term problems, and it has the potential to drive a wedge into our economy.”

This reporting first appeared in California Playbook. Sign up to receive it in your inbox every weekday.