California Billionaire Tax Proposal Qualifies for 2025 Ballot

A proposed one-time 5% tax on California residents with a net worth exceeding $1 billion has collected sufficient signatures to qualify for the November 2025 ballot.

The measure, known as the "2026 Billionaire Tax Act," was proposed by the Service Employees International Union-United Healthcare Workers West (SEIU-UHW).

Proposal Details

The tax would apply retroactively as of January 1, 2026, to California residents whose net worth exceeds $1 billion. A lower rate would apply to individuals with net worth between $1 billion and $1.1 billion, while the full 5% rate applies to those above $1.1 billion.

Assets subject to the tax include: stocks, art, businesses, collectibles, and intellectual property. Real estate, pensions, and retirement accounts are exempt.

The tax may be paid in a single payment or spread over five years, with additional costs for the installment option.

Approximately 200 California residents would be subject to the tax, according to supporters. Revenue projections estimate approximately $100 billion would be generated. Of that, roughly 90% would be allocated to healthcare programs, with the remainder directed to K-14 public education and state food assistance programs.

Signature Collection and Path to Ballot

Proponents reported collecting between 1.5 million and 1.6 million signatures, exceeding the required 875,000 valid signatures from registered voters. The signatures must be submitted to county election officials by June 24. State officials will verify the signatures.

If qualified, the measure would require approval from a majority of California voters to become law.

Governor Gavin Newsom does not have veto authority over the measure if it passes, as it is a direct-to-voters ballot initiative.

Political Divisions

The proposal has created divisions within the Democratic Party.

Supporters include:

• Senator Bernie Sanders (I-VT), who campaigned in Los Angeles in support of the measure
• Representative Ro Khanna (D-CA)
• Billionaire activist Tom Steyer

Opponents include:

• Governor Gavin Newsom (D-CA), who has stated he will "do what I have to do to protect the state" and has held meetings with SEIU leadership in an effort to stop the proposal
• Former Representative Katie Porter
• Former Health Secretary Xavier Becerra

Newsom has cited concerns about California's competitive position relative to other states and has blocked related legislation.

Reactions and Reported Relocations

Several billionaires have publicly opposed the tax, and some have reportedly taken steps to reduce their ties to California.

Reported moves or planned relocations:

Billionaires who have indicated they will remain:

• Jensen Huang (Nvidia CEO): Stated that relocation "never crossed [his] mind" and expressed acceptance of the tax
• Brendan Foody, Reid Hoffman, Dario Amodei, Vinod Khosla: All criticized the tax but have not announced plans to leave

Dave Nixon, a former healthcare executive who relocated to California from Florida in 2022, expressed support for the tax. Maureen Kennedy, a philanthropist based in Marin County, also supports the measure, citing rising healthcare costs.

Economic Analysis

The California Legislative Analyst's Office estimated the tax could generate tens of billions of dollars but noted significant uncertainty in the projection. Factors cited include:

• Potential actions by billionaires to reduce their tax burden
• Fluctuations in stock prices
• Potential loss of other tax revenue if wealthy individuals depart the state

A 2025 paper from the National Bureau of Economic Research indicated that billionaires averaged a 24% tax rate between 2018 and 2020, compared to 30% for the general population and 45% for top income earners.

A January poll indicated 48% support, 38% opposition, and 14% undecided among likely voters.

Arguments For and Against

Proponents, including SEIU-UHW, argue:

• The tax would ensure billionaires contribute proportionally to state services
• Revenue is needed to address federal healthcare funding cuts
• The tax is a "workable response" to healthcare funding challenges
• Academic literature suggests minimal relocation by wealthy individuals in response to such policies

Opponents, including the California Business Roundtable and Governor Newsom, argue:

• The tax could drive wealthy individuals and businesses from the state
• This could reduce future tax revenue and harm the state's economy
• California derives nearly half of its personal income tax revenue from the top 1% of earners
• The tax could effectively become an "everyone tax" if wealthier residents depart
• Legal challenges are anticipated if the tax is adopted

Legal and Implementation Considerations

If passed, the tax would be due in 2027. Lawyers representing billionaires have indicated they are prepared to mount constitutional challenges to the measure.

A separate federal proposal, the "Make Billionaires Pay Their Fair Share Act" introduced by Senator Sanders and Representative Khanna, would impose a 5% annual tax on assets exceeding $1 billion for approximately 938 individuals nationwide, projecting $4.4 trillion in revenue over a decade.