California Will Vote on a Billionaire Tax. Billionaires Aren’t Happy.

SACRAMENTO, Calif. — Californians will vote in November on a groundbreaking plan to impose a one-time tax on the wealth of billionaires, with most of the money going to healthcare, according to the union pushing the measure.

The billionaires are fighting back. Several wealthy Californians financed a campaign to get two competing measures onto the ballot that could nullify the tax before it’s even collected.

Gov. Gavin Newsom opposes the billionaire tax, but he had not reached a deal with the labor union that backs it before Thursday’s deadline to finalize the November ballot propositions.

The proposed tax has divided Democrats in California, a deep-blue state where progressive ideals often collide with support for a tech-driven economy that has created vast wealth.

The battle also reflects a broader tension in American politics. President Donald Trump and congressional Republicans passed big tax cuts for the wealthy last year while cutting food and healthcare benefits for many of the nation’s poor. Progressive Democrats like New York City’s mayor, Zohran Mamdani, and a Los Angeles mayoral candidate, Nithya Raman, have risen to prominence amid discontent over the rising gap between America’s richest people and everyone else.

Newsom, a moderate Democrat, is positioning himself for a possible presidential campaign in 2028. He has said a wealth tax should be considered at the national level, but that the California measure would threaten the state’s status as the nation’s powerhouse of innovation. He has vowed to defeat it.

The labor group backing the tax, the Service Employees International Union-United Healthcare Workers West, says the money would offset healthcare cuts that Trump signed into law last year. The union spent $31 million to get the tax on the ballot.

“This was not a hard decision for the members of our union,” Dave Regan, president of the union, said at a news conference Thursday evening. “We are going to have a righteous and needed conversation in California about what kind of state do we want, what kind of healthcare system do we want, and when is enough enough.”

Under California law, groups that gather enough voter signatures can put a proposed law on the ballot, and the addition of countermeasures has become a common tactic among competing interests. They can help defeat a measure simply by creating confusion among voters, or they can be used to create leverage with their opponents.

Before the ballot is finalized, initiative backers have a period during which they can negotiate with each other and state leaders over a compromise that lawmakers could pass. If they succeed, measures are removed from the ballot.

Newsom had tried to reach an agreement to remove the billionaire tax, but the deadline expired at 5 p.m. Thursday.

On Friday morning, Newsom proposed a national wealth tax. His plan calls for three changes to federal law that would make people with $100 million or more pay higher taxes. He said the country should stop allowing the ultrawealthy to take out tax-free loans against stock holdings; change inheritance rules to prevent “a permanent American aristocracy of inherited wealth”; and return to corporate tax rates in place before 2017.

“It’s time for an economic reset for America,” Newsom he wrote in the proposal.

The union’s measure asks voters to approve a one-time 5% tax on the assets of California residents with a net worth of at least $1.1 billion. Those worth between $1 billion and $1.1 billion would be taxed at a gradually lower rate. The state would be required to spend 90% of the revenue on healthcare and the rest on education and food assistance.

Estimates vary about how much the tax would generate to supplement the annual state budget, which is currently $321 billion.

Supporters say it would produce $100 billion over five years.

State budget analysts figure it would probably increase revenue by tens of billions of dollars over several years, but that income tax proceeds could drop by hundreds of millions of dollars annually because some billionaires would leave the state.

The tax would be the nation’s first to go after wealthy people’s net worth, including stock portfolios, trust funds, fine jewelry and art collections.

Supporters argue that even as California billionaires’ wealth has exploded in recent years, little has been captured by income taxes because the wealthiest people structure their finances to minimize taxable income. They figure that approximately 200 people in California would be subject to the tax, though wealth advisers have said they think the number is probably higher.

On its face, the tax presents California voters with an opportunity to fund healthcare and address wealth inequality in a fashion backed by Bernie Sanders, the progressive Vermont senator.

But the strange bedfellows opposing it show that the politics are not clear-cut. California has a progressive income tax that levies higher rates on people with higher incomes, including on capital gains from stock sales. Its budget relies heavily on income taxes collected from high earners to fund schools and other public services.

Unions representing teachers and police officers are among those that have come out against the tax, fearing a long-term hit if billionaires flee the state. Another concern is that revenue from the billionaire tax would go into a special fund and not be distributed in accordance with the normal state processes for funding schools and other programs.

“The dangerous wealth tax directly threatens vital funding for education and schools, healthcare and clinics, public safety, and infrastructure projects,” said a statement from leaders of the California Medical Association, California Primary Care Association and California School Boards Association.

Billionaires who could have to pay the tax are fighting back with ballot measures of their own.

A group funded by a Google co-founder, Sergey Brin, and several other billionaires has poured $97.6 million into rival measures that could undermine the billionaire tax. One would prohibit new taxes on personal property and financial assets. Another would require audits of programs funded by new taxes and contains a provision that could invalidate the billionaire tax.

Campaigns promoting the measures are hailing them as consumer-protection and good-governance reforms, and have not highlighted how they could nullify a billionaire tax.

If both the billionaire tax and a countermeasure pass, the one that garners the most “yes” votes would prevail. However, litigation seems likely no matter which side wins.

—

This article originally appeared in The New York Times.

By Laurel Rosenhall/Philip Cheung
c. 2026 The New York Times Company

The post California Will Vote on a Billionaire Tax. Billionaires Aren’t Happy. appeared first on GV Wire.