A proposed ballot measure to tax California’s wealthiest residents is igniting a fierce debate across the state, exposing deep divisions over wealth, healthcare, and the future of the California economy.
A Tax on Billionaires
The measure, which would impose a one-time tax of up to 5% on taxpayers with assets exceeding $1 billion, is still in the early stages. Proponents, led by the Service Employees International Union-United Healthcare Workers West, must gather nearly 875,000 signatures by June 24 to qualify for the November ballot. The union has already committed $14 million to the effort, and plans to begin collecting signatures soon, according to chief of staff Suzanne Jimenez.
Supporters argue the roughly $100 billion in revenue generated would be crucial to backfilling federal healthcare funding cuts signed by President Trump, potentially preventing as many as 3.4 million Californians from losing Medi-Cal coverage. Opponents, however, warn the tax could stifle innovation and drive wealthy individuals and businesses out of the state.
Political Fallout and Economic Concerns
The proposal has already created fractures within the Democratic party. Senator Bernie Sanders (I-Vt.) endorsed the tax, while Governor Gavin Newsom has consistently opposed state-based wealth taxes, citing concerns about California’s competitiveness. Newsom stated, “You can’t isolate yourself from the 49 others,” referring to other states. He has previously opposed similar measures in 2022 and 2023.
The state’s budget already relies heavily on income taxes from its highest earners, making revenues volatile and difficult to predict. According to UC San Diego political science professor Thad Kousser, “California politics forces together some of the richest areas of America with some of the poorest…The impulse to force those with extreme wealth to share their riches is only natural, but often runs into the reality of our anti-tax traditions.”
Some wealthy Californians have already signaled their intent to relocate. PayPal co-founder Peter Thiel and venture capitalist David Sacks announced new offices in Miami and Austin, respectively, at the end of 2025, moves seen by some as a strategy to avoid the potential tax. Kraken co-founder Jessie Powell stated on X, “I promise you this will be the final straw,” predicting an exodus of billionaires and their economic contributions.
What’s Next?
If proponents gather enough signatures, the measure will appear on the November ballot. Given the potential for significant spending on the campaign – there are no limits on contributions to ballot measure campaigns – the outcome is uncertain. It is possible the measure will qualify for the ballot, fueled by anger over economic inequality. However, its passage is far from guaranteed, given California’s history of rejecting tax increases and concerns about harming the state’s economy.
Frequently Asked Questions
What would the tax revenue be used for?
Ninety percent of the revenue generated by the tax would be allocated to healthcare programs, while the remaining 10% would fund food assistance and education programs.
Who would be affected by the tax?
The tax would apply to California residents with assets valued at more than $1 billion, including businesses, art, and intellectual property, but excluding property.
What is Governor Newsom’s position on the tax?
Governor Newsom has consistently opposed state-based wealth taxes, expressing concerns about the state’s competitiveness and the potential for wealthy residents to leave California.
Given the complex economic and political factors at play, how do you believe this proposed tax could reshape California’s future?
