California Billionaire Tax Act Qualifies for November Ballot

The proposed measure would impose a one-time 5% tax on California residents with a net worth exceeding $1 billion.

California election officials have confirmed that the California Billionaire Tax Act has collected enough signatures to qualify for the November ballot. The initiative, backed by the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), targets the state's wealthiest individuals.

Key Provisions of the Tax

The tax applies to residents whose net worth exceeded $1 billion as of January 1, 2026. Assets subject to the tax include stocks, businesses, art, collectibles, and intellectual property. Real property, pensions, and retirement accounts are excluded from the calculation.

Taxpayers may pay the liability in five annual installments, with a 7.5% fee applying to the unpaid balance under the installment option. The tax is due in 2027.

According to the Legislative Analyst's Office, the tax could generate tens of billions of dollars, though the exact amount is uncertain due to potential taxpayer behavioral adjustments and fluctuations in asset values. The initiative's website projects approximately $100 billion in revenue, while the Hoover Institution estimates $40 billion.

The measure would apply to an estimated 200 to 255 taxpayers, according to various sources.

Revenue Allocation

Revenue from the tax would be allocated as follows:

• 90% for healthcare programs, including preventing hospital and clinic closures, maintaining healthcare staffing, and stabilizing insurance premiums and coverage
• 10% for K-14 public education programs and California food assistance programs

Path to the Ballot

SEIU-UHW reported filing over 1.55 million signatures, exceeding the required 875,000 valid signatures from registered voters. County election officials are verifying the signatures. The signatures must be submitted by June 24 for the measure to appear on the November ballot. The measure requires a simple majority of voters to pass.

Political Reactions

Supporters

Supporters include Senator Bernie Sanders (I-VT) and Representative Ro Khanna (D-CA) . Sanders has campaigned in California in support of the measure, characterizing economic inequality as a central issue. Khanna has endorsed the state-level tax and criticized opposition from tech industry figures.

Opponents

California Governor Gavin Newsom has stated he will vote against the measure. Newsom has argued that state-level wealth taxes could drive wealthy residents and businesses to other states, potentially reducing California's long-term tax base. He has instead proposed a national minimum tax on individuals with net worth exceeding $100 million.

"State-level wealth taxes could drive wealthy residents and businesses to other states." — Governor Gavin Newsom

Other opponents include:

• Former presidential candidate Andrew Yang
• Democratic gubernatorial candidates Xavier Becerra and Katie Porter
• Republican gubernatorial candidate Steve Hilton
• The California Teachers Association, Planned Parenthood, and the California Medical Association
• The California Business Roundtable

Opposition Campaign and Funding

Opposition campaigns have raised $107.9 million as of June 15. Google co-founder Sergey Brin contributed $82 million. PayPal co-founder Peter Thiel contributed $3 million to a political action committee opposing the measure.

Opposition groups are funding competing ballot initiatives that would invalidate or weaken the billionaire tax if they receive more votes.

Billionaire Relocations

Multiple billionaires have changed their residency or announced plans to do so in response to the proposed tax:

Some billionaires have criticized the tax but have not announced plans to leave, including Reid Hoffman, Dario Amodei, and Vinod Khosla. Nvidia CEO Jensen Huang expressed support for the tax, stating he had not considered relocating.

Economic Analysis

The Legislative Analyst's Office stated that while the state could collect tens of billions of dollars initially, the measure could later reduce personal income tax collections by hundreds of millions annually due to taxpayer behavioral adjustments. California currently derives nearly half of its personal income tax revenue from its top 1% of earners.

The Tax Foundation warned of potential drafting errors that could increase the effective tax rate and force founders to sell shares, affecting stock prices and retirement savings.

Research from UC Berkeley, UC Davis, and the University of Missouri indicates that U.S. billionaires paid an estimated 24% of their economic income in taxes between 2018 and 2020, compared to the U.S.-wide average of 30%.

Legal Challenges

Lawyers representing billionaires have indicated they are prepared to mount constitutional challenges if the tax is adopted. The retroactive structure of the tax, which applies to wealth accumulated as of January 1, 2026, may face legal scrutiny.

Background

The union launched the initiative in response to the One Big Beautiful Bill Act, which they estimate will cause nearly $100 billion in federal funding losses for California healthcare over five years. The California Budget & Policy Center estimated the federal cuts could lead to 3.4 million Californians losing Medi-Cal coverage and rural hospital closures.

Similar federal wealth tax proposals have been introduced by Senator Bernie Sanders and Representative Ro Khanna, proposing an annual 5% tax on billionaires with a $3,000 payment to lower-income households. Governor Newsom has proposed a national minimum tax on individuals worth over $100 million.