As California approaches a key ballot deadline, a proposed tax on the wealth of the state’s billionaires is becoming one of the most closely watched fights heading toward the November 2026 election.
The measure, backed by SEIU-United Healthcare Workers West, would impose a 5% tax on the personal wealth of California’s estimated 200 billionaires. Supporters say the money would help protect health care access while also providing funding for public education and food assistance programs.
But the proposal has drawn sharp opposition from some of the state’s wealthiest residents, business interests, Gov. Gavin Newsom and even some labor groups. The dispute has renewed a long-running debate in California politics: who should pay for public services, and how much?
California’s initiative system was created in the early 20th century as part of a reform movement led by figures such as Gov. Hiram Johnson, who argued that voters needed a way to bypass a Legislature heavily influenced by powerful interests. More than a century later, ballot measures have become expensive political battles, often funded by groups with major financial stakes in the outcome.
Recent elections have shown how costly those fights can become. In 2022, casino-owning tribal governments and online gambling companies spent roughly half a billion dollars on competing sports betting measures. Voters rejected both, but the campaign underscored the enormous sums that can be spent when billions of dollars in future revenue are at stake.
The billionaire tax proposal is part of a broader set of tax-related measures expected to shape the next statewide ballot. Public employee unions and other advocates for expanded services are pushing for additional revenue, while opponents argue California already depends too heavily on high earners and businesses to fund state government.
Under the SEIU-UHW proposal, 90% of the money raised from the billionaire wealth tax would go toward health care. Smaller portions would support public education from kindergarten through community college and food assistance programs. The measure’s backers have estimated the tax could generate tens of billions of dollars, potentially as much as $100 billion.
That allocation has caused friction even among groups that often support tax increases. Some unions have objected to the plan because health care would receive the overwhelming majority of the proceeds, leaving comparatively modest shares for schools and anti-hunger programs.
Newsom has emerged as the most prominent opponent of the proposal and has been pressing SEIU-UHW leaders to withdraw it before the ballot is finalized. The deadline to remove measures from the November ballot is approaching quickly.
Opponents argue the measure could damage the state’s budget by prompting wealthy Californians to leave. California relies heavily on income taxes paid by high earners, making state revenue especially sensitive to the financial decisions of a small number of residents. Critics say a tax on wealth, even if described as a one-time levy, could convince billionaires and other wealthy households that California is becoming too unpredictable.
Some wealthy Californians have already left the state, citing the potential tax as a factor, while others may have quietly changed their residency. Opponents have also formed campaign committees and pursued countermeasures intended to blunt or undercut the tax if it reaches voters.
A central issue in the dispute is whether the proposal would truly be limited to a one-time tax. The measure states that lawmakers could amend the tax if changes are consistent with and advance the purposes of the Billionaire Tax Act. Those stated purposes include protecting access to high-quality and equitable health care and supporting funding for education and food assistance by raising revenue from billionaire wealth.
Critics contend that language could give the Legislature room to extend the tax or broaden it to people with lower levels of wealth, depending on how courts interpret the measure. Supporters frame the proposal as a targeted way to raise money from the very richest Californians for essential public needs.
California’s political history gives opponents another argument. In 2012, voters approved what was described as a temporary income tax increase on the state’s wealthiest residents. Four years later, unions and other supporters backed a successful measure extending that tax through 2030. A new proposal this year seeks to make it permanent.
That history has become part of the case against the billionaire tax. Once a revenue source is created, opponents say, groups that benefit from the funding have strong incentives to keep it going.
For voters in Southern California and the Inland Empire, the debate could have practical consequences. State funding for health care, schools, community colleges and food assistance affects counties such as Riverside and San Bernardino, where demand for public services remains high. At the same time, the statewide budget depends heavily on revenue from high-income taxpayers, making any shift in where wealthy residents live or pay taxes a matter of concern for local governments and service providers.
Whether the billionaire tax actually appears on the November ballot now depends on the final days before the deadline. If it remains, California voters will be asked to decide another high-stakes tax question — one likely to draw major spending from both supporters and opponents.
Original source: CalMatters
