Billionaire tax launches civil war aspowerful union breaks with progressives

California’s billionaire tax is now splitting Big Labor.Chris Hannan, president of the powerful State Building and Construction Trades Council, slammed the proposal in an interview with Politico, saying it could end up crushing big projects like sports arenas and other large-scale developments that employ skilled tradesmen up and down the state.“It’s not because we feel that anyone shouldn’t have to pay their fair share, but doing a retroactive tax, we believe, would drive people out of the state and drive investment out of the state,” Hannan told the outlet.The comments on the proposed billionaire tax mark a notable split in California’s influential organized labor scene.The measure — titled the “Healthcare Executive Compensation Act” and backed by SEIU-United Healthcare Workers West — would impose a one-time 5% tax on Californians with fortunes exceeding $1 billion.

Backers of the tax claim it’s needed in light of federal funding cuts to Medi-Cal and other health care programs.At least six billionaires, including Google co-founder Larry Page and PayPal co-founder Peter Thiel, reportedly cut ties with California before the start of this year to avoid the potential tax.David Lesperance, a tax adviser who specializes in relocating ultra-wealthy clients out of high-tax jurisdictions, told Bloomberg he personally helped four billionaires end their California residency before the proposal’s Jan.1 cutoff date.If the wealth tax passes, “what we believe would happen is these individuals would leave California and would take these investments to other states — losing the jobs for our members, losing tax revenue that goes into the general fund,” Hannan said.Politico first reported the building trades’ opposition and comments from Chris Hannan, president of the powerful statewide union, who warned the proposal could chase away the same billionaire investors who help finance major projects that keep his members working.A recent survey by the P...