Business groups and billionaires fighting a statewide wealth tax just got a template for how to persuade liberal voters to reject “eat the rich” populism.
Voters in San Francisco were leaning toward rejecting a separate union-backed “overpaid CEO tax” that was on the city’s primary ballot last week, according to early returns. The race has not been called. But if the margins hold — or even if the tax ekes out a narrow victory — it will mark a stunning shift for a deep-blue city where voters have repeatedly embraced business-tax increases over the last two decades. Progressive ballot measures typically need to win by a wide margin in liberal San Francisco to achieve a majority statewide.
“If you can’t do it in San Francisco, you certainly can’t do it statewide,” said Dan Newman, a veteran Democratic consultant working the opposition campaigns for both tax measures. “The No On Prop D campaign showed the way.”
Local unions behind the San Francisco measure, Proposition D, have yet to concede.
But supporters of the measure are already offering one reason it might fail, noting that they were dramatically outspent by tech titans and business groups, who poured about $7 million into defeating Prop D.
Opponents of the tax say it was more than money — it was a test case for messaging and strategies that can now be deployed to fight a tax on billionaires proposed by SEIU-United Healthcare Workers West, which could appear on the November ballot. Initial polling from earlier this year suggested the San Francisco measure was supported by 60 percent of voters. Returns as of this morning had the measure now trailing by a wide margin, 54-46 percent.
The central argument of the No On Prop D campaign was an appeal to voters’ economic anxieties, a warning that the tax hike would harm the city’s fragile economic recovery by driving more large corporations to leave town. Opponents of both taxes say that argument can be replicated in the statewide campaign against the wealth tax, which opponents argue would harm the state’s bottom line by driving more billionaires to move to other states, including Texas and Florida.
“The fear of economic damage could overwhelm the ‘eat the rich’ emotional sentiment,” saidJay Cheng, a Democratic consultant who worked on the campaign against Prop D. “There’s a real underlying voter sentiment that the economy is very wobbly.”
The wealth tax and Prop D are two different kinds of tax proposals — the statewide proposal would impose a one-time tax on the assets of billionaires, while Prop D would have enacted a surtax on the revenue of large corporations doing business in San Francisco if they have highly paid CEOs.
Newsom has already been outspoken about his opposition to the tax, arguing it will harm California’s tech innovation economy (he instead proposes taxing billionaires at the national level). The California Teachers Association and other liberal-leaning groups have recently been coming out against the measure. And Newman, a longtime adviser to the governor, predicted he would give SEIU-UHW a tough fight on the airwaves.
“There are pitchforks out, and that can lead some groups to make poor decisions looking at early polling,” Newman said.
For more information see Dustin Gardiner and Lindsey Holden “A warning sign for billionaire tax proponents” Politico, June 8, 2026.