Californias

SACRAMENTO — Two of the top Democratic candidates in the race for California governor are taking heat for their past votes to fund and support federal immigration enforcement as the backlash against the Trump administration’s actions in Minnesota intensifies after the shooting death of Alex Pretti.

Fellow Democratic candidates are criticizing Rep. Eric Swalwell and former Rep. Katie Porter for voting — in Swalwell’s case, as recently as June — to fund Immigration and Customs Enforcement and support its agents’ work.

Swalwell (D-Dublin) last year voted in favor of a Republican-sponsored resolution condemning an attack that injured at least eight people demonstrating in support of Israeli hostages, one of whom later died, in Boulder, Colo., and expressing “gratitude to law enforcement officers, including U.S. Immigration and Customs Enforcement personnel, for protecting the homeland.”

He was one of 75 Democrats, including nine from California, to cross the aisle and vote in favor of the resolution.

“The fact that Eric Swalwell stood with MAGA Republicans in Washington to thank ICE while in California masked ICE agents terrorized our communities — despite Swalwell’s notorious and chronic record of absenteeism from Congress, is shamefully hypocritical,” former Los Angeles Mayor Antonio Villaraigosa, a rival Democrat running for governor, said in a statement.

Swalwell’s campaign dismissed the attack as a “political ploy” by “a desperate campaign” polling in single-digits.

“What Eric voted for was a resolution to condemn a horrific antisemitic attack in Boulder, CO that killed Karen Diamond, an 82-year old grandmother,” a campaign spokesman said in a statement. “The truth is no one has been more critical of ICE than Eric Swalwell.”

The exchange comes as Villaraigosa, Swalwell and other Democrats running to replace Gov. Gavin Newsom, who is serving his final year in office, struggle to differentiate themselves in a tight race that lacks a clear front-runner.

In a poll released in December by the Public Policy Institute of California, Porter led the field with support from 21% of likely California voters. She was slightly ahead of former U.S. Secretary of Health and Human Services Xavier Becerra and conservative commentator Steve Hilton but had far from a commanding lead.

With the June 2 primary election fast approaching, the sparring among the candidates — especially in the crowded field of Democrats — is expected to intensify, with those leading in the polls fielding the brunt of the attacks.

The Trump administration’s immigration tactics face mounting political scrutiny after federal agents fatally shot Pretti, a 37-year-old intensive care nurse from Minneapolis, during a protest over the weekend.

Pretti was the second U.S. citizen in Minneapolis to be killed by immigration officers in recent weeks. Renee Good, a 37-year-old mother, was shot in the head by an ICE officer Jan. 7. Federal officials have alleged it was an act of self-defense when Good drove her vehicle toward an officer — an assertion under dispute.

In recent days, Swalwell said that if elected, he would revoke the driver licenses of ICE agents who mask their faces, block them from state employment and aggressively prosecute agents for crimes such as kidnapping, assault and murder.

Tony Thurmond, another Democrat currently serving as California’s top education official, in an online political ad criticized Swalwell’s vote as well as several by Porter for bills to fund ICE and Trump’s border wall during the president’s first term.

Porter and Swalwell joined majorities of Democratic House members to support various spending packages in Congress, which included billions for a border wall and in at least one case, avoided a government shutdown.

“When others have stayed quiet, Katie has boldly spoken out against ICE’s lawlessness and demanded accountability,” said Porter campaign spokesman Peter Opitz.

Thurmond’s video touted his own background as a child of immigrants and support for a new law that attempts to keep federal immigration agents out of schools, hospitals and other spaces.

Tom Steyer, a billionaire Democrat also running for governor, said Tuesday that he supports abolishing ICE “as it exists today” and replacing it with a “lawful, accountable immigration system rooted in due process and public safety.”

Republicans blame Democrats and protesters

The two most formidable Republicans running for governor have generally supported Trump’s immigration strategy but have not commented directly on Pretti’s killing over the weekend.

Hilton, a former Fox News host, wrote in an email that “every sane person is horrified by the scenes of chaos and lawlessness in Minneapolis, and most of all that people are getting killed.”

But he linked violence to sanctuary policies in Democratic-run states and cities, including California, which prohibit local law enforcement from coordinating or assisting with federal immigration enforcement.

“The only places we’ve seen this kind of chaos are ‘sanctuary’ cities and states, where Democrat politicians are whipping people up into a frenzy of anti-law enforcement hate, and directly putting their constituents in harm’s way by telling them — from behind the safety of their own security details — to disrupt the enforcement of federal law,” Hilton said.

The conservative pundit said the “worst offender” is Newsom, whom Hilton accused of using “disgustingly inflammatory language designed to rile up his base in pursuit of his presidential ambitions.”

Riverside County Sheriff Chad Bianco’s campaign did not respond to questions about events in Minnesota. Bianco has repeatedly criticized California’s sanctuary state policy but affirmed last year that his department would not assist with federal immigration raids.

On Sunday, Bianco posted on X that “Celebrities and talking heads think they understand what it’s like to put on a uniform and make life or death decisions,” an apparent reference to the encounter that resulted in Pretti’s death.

In the roiling debate over California’s proposed billionaire tax, supporters and critics agree that such policies haven’t always worked in the past. But the lessons they’ve drawn from that history are wildly different.

The Billionaire Tax Act, which backers are pushing to get on the November ballot, would charge California’s 200-plus billionaires a one-time, 5% tax on their net worth in order to backfill billions of dollars in Republican-led cuts to federal healthcare funding for middle-class and low-income residents.

Critics of the proposal have argued that past failures of similar wealth taxes in Europe prove they don’t work and can cause more harm than good, including by driving the ultra-rich out. Among those critics is San José Mayor Matt Mahan, a tech-friendly Democrat who is contemplating a run for governor.

“Over the last 30 years, we’ve seen a dozen European countries pursue national-level wealth taxes,” Mahan said. “Nine of them have rolled them back. A majority have seen a decline in overall revenue. It’s actually shrunk the tax base, not increased it, and it’s because it creates a perverse incentive and drives capital flight.”

Backers of the measure acknowledge such failures but say that they learned from them and that California’s proposal is stronger as a result.

Brian Galle, a UC Berkeley tax law professor and one of four academic experts who drafted the measure, said if it gets on the ballot, every voter in the state will receive a copy of the full text, a one-page explainer on what it does, and nearly two dozen additional pages of “rules for preventing wealthy people and their army of lawyers from dodging” it.

Many of those rules, he said, are based on historical lessons from places where such taxes have failed, but also where they’ve succeeded.

“If you understand the actual lessons of history, you understand that this bill is more like the successful Swiss and Spanish wealth taxes,” Galle said. “Part of that is learning from history.”

Warnings from Europe

Since the 1990s, several European countries have repealed net wealth taxes, including Austria, Denmark, Finland, France and Germany.

A major example cited by critics of the California proposal is France, which implemented a much larger wealth tax on far more people, including many millionaires. The measure raised modest revenues, which fell as rich people moved out of the country to avoid paying, and the measure was repealed by the government of President Emmanuel Macron in 2017.

In a 2018 report on net wealth taxes, the Paris-based Organization for Economic Co-operation and Development found that European repeals were often driven by “efficiency and administrative concerns and by the observation that net wealth taxes have frequently failed to meet their redistributive goals.”

“The revenues collected from net wealth taxes have also, with a few exceptions, been very low,” it found.

Critics and skeptics of the California proposal say they expect California to run into all the same problems.

Mahan and others have pointed to a handful of prominent billionaires who already appear to be distancing themselves from the state, and said they expect more to follow — which Mahan said will reduce California’s “recurring revenue” beyond the amount raised by the one-time tax.

Kent Smetters, faculty director of the Penn Wharton Budget Model, which analyzes the fiscal effects of public policies, said net worth taxes in other countries have “always raised quite a bit less revenue than what was initially projected,” in large part because “wealth is easy, as it turns out, to try to reclassify or move around” and “there’s all these tricks that you can do to try to make the wealth look smaller for tax purposes.”

A bus in London promotes a campaign by British millionaires advocating for an end to extreme wealth and inequality.

(Carl Court / Getty Images)

Smetters said he expects that the California measure will raise less than the $100 billion estimated by its backers because billionaire wealth in California — much of it derived from the tech sector — is relatively “mobile,” as many tech barons can move without it affecting business.

“Policymakers have to understand that they’re not going to get nearly as much money as they often project from a purely static projection, where they’re not accounting for the different ways that people can move their wealth, reclassify their wealth, or even just move out of the state,” Smetters said. “So far, we only know of a few people — with a lot of money — who have moved out of the state, [but] that number could go up.”

Kevin Ghassomian, a private wealth lawyer at Venable who advises rich clients, said he expects the administrative costs of enforcing the tax to be massive for the state — and much greater than the drafters have anticipated.

On the front end, the state will face a wave of legal challenges to the tax’s constitutionality and its retroactive application to all billionaires living in the state as of the end of 2025.

Moving ahead, he said, there will be litigation from wealthy individuals whose departure from California is questioned or who dispute the state’s valuation of their net worth or individual assets — including private holdings, which the state doesn’t have extensive experience assessing.

Valuating such assets will be “a nightmare, just practically speaking, and it’s going to require a lot of administrators at the state level,” Ghassomian said, especially considering many California billionaires’ wealth is in the form of illiquid holdings in startups and other ventures with fluctuating market valuations.

“You could be a billionaire today, and then the market plummets, and now all of a sudden, you’re a pauper,” he said. “It could really lead to some unfair results.”

Lessons from Europe

Backers of California’s proposal said they have accounted for many of the historical pitfalls with wealth taxes and taken steps to avoid them — including by making it harder for wealthy Californians to simply shuffle money around to avoid the tax.

“There are a lot of provisions that are designed based on what has worked well in other countries with wealth taxes in the modern era, especially Switzerland, and there are also provisions meant to shut down some of the holes in some of the earlier wealth tax efforts, especially the France one, that were viewed as not successful,” said David Gamage, a University of Missouri tax law professor and another of the proposal’s drafters.

Galle said the Organization for Economic Co-operation and Development study found that many of Europe’s historical wealth taxes “hadn’t figured out how to solve the problem of what small businesses were worth,” so were more narrowly focused on publicly traded stock and real estate. “Over time, there was a lot of abuse where people shifted their assets to make them look privately held.”

The California proposal “tries to solve that problem” by including small businesses and other privately held wealth in their calculations of net worth, he said — and benefits from the fact that such wealth has gotten a lot easier to track and appraise in recent years.

Doing so would be a familiar exercise for many California billionaires already, he said, as it is hard to raise venture capital, for example, without audited financial statements.

Backers of the measure said it is harder for U.S. citizens to avoid taxes by moving abroad than it has been for Europeans, and that evidence from Switzerland and Spain suggests differing tax rates between a nation’s individual states do not cause massive interstate flight.

San José Mayor Matt Mahan, who might run for governor, opposes the proposed tax on California billionaires.

(Rich Pedroncelli / Associated Press)

For example, each state in Spain sets its own wealth tax rate, and Madrid’s is 0% — but that has not caused an exodus from other parts of Spain to Madrid, Galle said.

The risk of California billionaires avoiding the tax by simply moving to another U.S. state was further mitigated by the measure’s Jan. 1 deadline for avoiding the tax. Galle said the deadline “was intended to make it more difficult for individuals to concoct the kind of misleading, apparent moves that wealthy people have used in other places to try to avoid a wealth tax.”

Gamage said that “history shows if a tax on the wealthy can be avoided by moving paper around, claiming that you live in another location without actually moving your life there, moving assets to accounts or trusts nominally in foreign countries or other jurisdictions, you see large mobility responses.”

But when “those paper moves are shut down,” there’s much less moving — and “that’s the basis for the California model,” he added.

The outlook

Ghassomian, who said he has been “fielding a lot of inbound inquiries from clients who are just kind of worried,” said it is clear that the proposal’s authors “have done their homework” and tried to design the tax in a smart way.

Still, he said, he has concerns about the cost of administering the tax outpacing revenues, especially amid litigation. Residency battles alone with billionaires whose claims of departing the state are questioned could take “years and years and years” to resolve, he said.

“The revenue has to line up with expenditures, and if you can’t count on the revenue because it’s going to be tied up in courts, or it’s going to be delayed, then I think that creates some real logistical hurdles,” he said.

Smetters said predicting revenues from a tax on so many different types of assets is “really hard,” but one thing that has generally held true through history is that “most countries, even with less-mobile wealth, typically do not get the type of revenue that they were hoping for.”

David Sacks, a venture capitalist and President Trump’s AI czar who decamped from California to Texas, said on the sidelines of the World Economic Forum in Davos, Switzerland, last week that the measure was an “asset seizure” more than a tax, and that the state would be headed in a “scary direction” if voters approved it.

Darien Shanske, a tax law professor at UC Davis and another drafter of the proposal, said he and his colleagues did their best to “look at the lessons of the past, and apply them in a way that makes sense and is generally fair and administrable” — in a state where wealth inequality is rapidly growing and a wealth tax presents unique opportunities.

“Having a tax on billionaires does make particular sense in California because of the large number that live here and the large number who have made their fortune here,” he said.

Shanske said the proposed tax is designed to provide California a way to “triage” soaring healthcare premiums resulting from legislation enacted by the Trump administration and congressional Republicans. The proposal asks for contributions from people who will quickly recoup what they are taxed given the exponential growth of their assets, he said.

Emmanuel Saez, director of the Stone Center on Wealth and Income Inequality at UC Berkeley and another drafter of the measure, said many of the repealed European taxes targeted millionaires while providing loopholes for billionaires to avoid paying, whereas California’s measure is “exactly the reverse.”

He said the measure will raise substantial revenue in part because California billionaire wealth more than doubled from 2023 to 2025 alone, and is “the innovative and first-of-its-kind tax on the ultra-wealthy that the moment requires.”

Thomas Piketty, a French economist and author of “Capital in the Twenty-First Century,” called California’s proposed tax “very innovative” and “relatively modest” compared with massive wealth taxes after World War II — including in Germany and Japan — and said it would not only improve healthcare in the state but “have an enormous impact on the U.S. and international political scene.”

“In the current context, with a deeply entrenched billionaire class, wealth taxes meet even more political resistance than in the postwar context, and this is where California could make a huge difference,” he said. “The fact of targeting the revenue to health spending is also very innovative and can help convince the voters to support the initiative.”

Times staff writer Seema Mehta contributed to this report.