A proposed ballot measure in California seeks to implement a one-time 5% tax on the net worth of residents with assets exceeding $1 billion. The initiative, spearheaded by the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), aims to generate approximately $100 billion, with 90% of the revenue designated for state healthcare programs and the remainder for public education, food assistance, and tax administration. The proposal, if approved by voters in November, would apply retroactively to residents as of January 1 and allow five years for payment. The initiative has generated varied reactions from politicians and tech industry leaders.
Proposal Details
The "2026 Billionaire Tax Act" targets various assets, including stocks, art, businesses, collectibles, and intellectual property. To qualify for the November state ballot, the proposal requires between 874,641 and 900,000 petition signatures.
Proponents have cited examples of potential tax contributions:
- Nvidia CEO Jensen Huang: Approximately $7 billion
- Google co-founder Larry Page: Approximately $13 billion
- Palantir co-founder Peter Thiel: Approximately $1.3 billion
Support and Opposition
Support for the Tax:
- Service Employees International Union-United Healthcare Workers West (SEIU-UHW): Suzanne Jimenez, chief of staff for SEIU-UHW, stated the current system results in "regular working people pay[ing] higher effective tax rates than the wealthiest Americans." She described asking the wealthiest to contribute more as a "reasonable step" to stabilize healthcare systems.
- Representative Ro Khanna (D-Silicon Valley): Khanna supports the concept, suggesting tech billionaires would likely remain in California due to the established industry presence, innovation, and talent pool. He believes a billionaire tax could benefit American innovation by spreading wealth to other sectors.
- Senator Bernie Sanders (D-Vermont): Sanders has endorsed the plan, suggesting it could serve as a model for other states.
- Patriotic Millionaires: Dave Nixon, a former healthcare executive, relocated to California in 2022 and supports the tax, citing California's performance in areas like education and healthcare. Maureen Kennedy, a philanthropist and member, supports the bill to address rising healthcare costs. Kennedy noted that health spending increased by 7.5% between 2022 and 2023, while average wages grew by 4.43%. She also highlighted a 2025 paper from the National Bureau of Economic Research indicating billionaires averaged a 24% tax rate between 2018 and 2020, compared to 30% for the general population and 45% for top income earners.
- Jensen Huang (CEO, Nvidia): Huang expressed acceptance, stating, "We chose to live in Silicon Valley. And whatever taxes I guess they would like to apply, so be it." He affirmed Nvidia's presence in Silicon Valley is due to the availability of engineers and stated his focus on "building the future of AI."
Opposition to the Tax:
- Governor Gavin Newsom (D-California): Newsom has expressed consistent opposition to state-level wealth taxes, citing concerns about a "competitive environment" among states and the potential for an exodus of high-net-worth individuals, which could lead to a loss of tax revenue and disadvantage California's economy. He mentioned efforts by his office to prevent the measure from moving forward.
- Peter Thiel (co-founder, Palantir and PayPal): Thiel has contributed $3 million to a committee opposing the tax. His investment firm, Thiel Capital, also announced an office opening in Miami, where he has maintained a residence.
- Larry Page and Sergey Brin (Google co-founders): Reports indicate they have begun shifting assets out of California, with Page's associated companies filing incorporation documents in Florida and Page purchasing properties in Miami.
- David Sacks (Venture Capitalist): Sacks announced a move to Texas in December, stating Austin would replace San Francisco as the tech capital in response to perceived "socialism."
- Chamath Palihapitiya (Venture Capitalist): Palihapitiya stated that without billionaires, California's "budget deficit will only get bigger."
- Vinod Khosla (Investor): Khosla suggested California would "lose its most important taxpayers and net off much worse."
- Aaron Levie (CEO, Box): Levie voiced concerns that the tax could prompt entrepreneurs to seek other locations for their companies and startups.
- California Business Roundtable: This lobby group, which has received funding from Thiel, campaigns against the measure, arguing it would lead to investments leaving the state.
- Attorney Alex Spiro: Spiro sent a letter to Governor Newsom on behalf of unnamed clients opposing the tax.
Economic and Relocation Considerations
California currently derives nearly half of its personal income tax revenue from its top 1% of earners. Critics of the tax, including business groups, argue it could undermine the economy, affect the state budget, and potentially increase costs for working families.
Several prominent tech figures have either relocated from California in recent years or have reportedly shifted assets:
- Elon Musk: Moved to Texas in 2020.
- Joe Lonsdale: Relocated Palantir to Austin in 2020.
- Larry Ellison: Moved Oracle's headquarters to Texas in 2020, though he has since announced a move to Nashville.
- Larry Page and Sergey Brin: Reportedly shifting assets to Florida.
- Peter Thiel: Maintains a residence in Miami and his firm opened an office there.
- David Sacks: Announced his move to Texas in December.
Proponents of the tax, including SEIU-UHW, assert that the threat of an exodus is overstated. They point to states like Massachusetts and Washington, which have implemented other forms of wealth taxes and reportedly raised billions of dollars while high-income residents' portfolios continued to grow.