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U.S. Sen. Bernie Sanders delivered a fiery warning to what he called the “billionaire class” at a rally Wednesday in Los Angeles in support of a tax initiative that would target California’s wealthiest residents.

“The billionaire class no longer sees itself as part of American society,” said the Vermont independent, who won the 2020 California Democratic presidential primary by 8 percentage points over former President Joe Biden. “They see themselves as something separate and apart, like the oligarchs of the 18th Century, the kings and the queens and the czars, they believe they have the divine right to rule and are no longer subject to democratic governance.”

The proposed November initiative would tax the 2025 net worth of billionaires residing in California by 5%, allowing them to pay off the tax over five years. The revenue would go into a special fund with 90% reserved for health care and 10% reserved for K-12 education.

Instead of targeting income, like most taxes, this one aims at individuals’ collected wealth.

“They’re saying there’s nothing you can do about it. Well, we’ve got some bad news for them, starting right here in California,” Sanders told the L.A. crowd.

He said California’s richest people are preparing to spend heavily to defeat the initiative, and voters should be ready for deceptive messaging.

“Their ads will not be saying, ‘We are billionaires, we want it all, please vote down this referendum,’” Sanders said to laughs from the crowd at The Wiltern theater. “What they are saying is, ‘If you stand up to us, we are gonna punish you.’”

SEIU and Los Angeles Hospital Sponsor the Tax Proposal

Service Employees International Union-United Healthcare Workers West and St. John’s Community Health in Los Angeles, the sponsors of the proposal, are gathering signatures to place the measure on the ballot in November amid opposition from some other unions.

It’s also a risky proposition for Gov. Gavin Newsom, who is eyeing a 2028 presidential run and needs the support of the deep pockets in Silicon Valley, to whom he has been close for years. He and the leading Democrats who are running to replace him have come out against the tax as part of a larger opposition push expected to ramp up in the coming weeks. They argue that they support making wealthy people pay more, but this specific measure would drive billionaires out of California.

That pushback will now also include Republican U.S. Rep. Kevin Kiley, who pledged to introduce a bill this week in Congress that would prohibit any state from levying a tax retroactively on people who no longer live in the state.

Dr. Jackline Lasola, an obstetrician, said at the rally Wednesday that the tax would help maintain staffing in hospitals that could be affected by an estimated $30 billion in annual cuts to federal Medicaid funds, beginning in 2027.

“At a time when this administration is gutting our health care, our safety nets and our public services, we’re here to protect Californians,” Lasola said. “It’s time to tax the billionaires.”

Tom Morello, guitarist for Rage Against the Machine, played the band’s best-known song, “Killing In The Name Of,” but replaced the second half of a lyric: “Some of those who burn crosses / are the same that hold office.”

California Faces Huge Medicaid Funding Deficit

There’s little question that California could use the money. President Donald Trump’s sweeping tax reform and budget bill — the One Big Beautiful Bill Act — is projected to cut nearly $1 trillion from Medicaid over a decade.

California is estimated to lose roughly $30 billion in federal Medicaid funds annually as a result. The state’s Medi-Cal agency estimates 3.4 million people will lose coverage as a result of federal eligibility changes. The bulk of cuts won’t take effect until 2027, but states, including California, are already taking steps to shrink their health insurance programs for low-income and disabled individuals.

Opponents of the billionaire tax argue that its impacts won’t be felt for years, but the state budget will be hit from losing the income tax that the billionaires pay, which accounts for a significant portion of California’s revenue.

The opposition has coalesced around three proposed ballot measures designed to invalidate the proposed billionaire tax. One would forbid retroactive taxes, a second would prohibit any taxes that exclude revenues from their calculation and a third would exempt non-residents and part-time residents from a net-worth tax.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.