Proponents of a tax on California billionaires vowed Thursday to press ahead with their November ballot measure despite growing opposition from many of the state's most powerful political forces.
A union spent $31 million collecting signatures to qualify the measure for the ballot in an effort to offset federal cuts to healthcare funding that will affect millions of California's most vulnerable residents. A campaign representative supporting the ballot measure dismissed opposition to the effort as wealthy, self-entitled Californians with entrenched interests in Sacramento.
“While a few morally bankrupt billionaires and their friends in Sacramento want California hospitals closed and tax breaks for billionaires protected, I assure you the vast majority of voters don't want it,” said Debru Carthan, spokesperson for the Billionaire Tax Now Coalition, which is funded by the Service Employees International Union-United Healthcare Workers of the West, the sponsor of the proposal.
California's secretary of state is expected to officially certify the measure for the Nov. 3 vote Thursday night.
Carthan said his effort has support in public opinion polls and from legislators, unions, community organizations and volunteers across the state, “something billionaires and their friends will never have.”
However, a coalition of health care, education, public safety, housing, business and union leaders who opposed the proposal warned that it would make the state's notoriously unstable budget even more unpredictable.
“The dangerous wealth tax directly threatens vital funds for education and schools, health care and clinics, public safety and infrastructure projects by making California's revenues even more volatile,” said leaders of the California Medical Association, the California Primary Care Association. and the California School Boards Association. he said in a statement. “That's why so many leaders, both Democrats and Republicans, are joining us and saying NO. We look forward to making sure voters know the facts, know what's at stake, and resoundingly reject this reckless experiment in November.”
Supporters of the one-time proposal for a 5% tax on the assets of the state's wealthiest residents presented the effort as a stopgap measure to offset devastating federal cuts to health care funding passed by the GOP-led Congress and signed by President Trump nearly a year ago. The federal legislation is expected to result in $100 billion in cuts that would impact California's most vulnerable residents.
The proposed tax, which would be retroactive to billionaires living in the state as of Jan. 1, drew predictable opposition from the wealthy, particularly Silicon Valley tech leaders.
But it notably divided liberals. While Sen. Bernie Sanders (I-Vt.) and Rep. Ro Khanna (D-Fremont) supported the proposal, Gov. Gavin Newsom was among Democrats who opposed it, fearing the potential impact on the state's volatile budget.
Despite being the world's fourth-largest economy (home to Hollywood and Silicon Valley), California's budget relies heavily on the state's most prosperous residents.
Newsom and others who generally support raising taxes on the wealthiest Americans also argued that California's proposed billionaire tax was poorly crafted and that such taxes should be enacted nationally, because varying state policies would be ineffective.
Opponents also argued that the political priority in the 2026 midterm elections should be squarely focused on efforts to ensure Democrats regain control of Congress to serve as a counterweight during the final two years of Trump's presidency.
“It's disappointing. This is a critical election where we need to focus on turning the house around and undoing the damage done” by Trump's legislation that led to cuts in health care funding, said Jodi Hicks, CEO and president of Planned Parenthood Affiliates of California. The estate tax “is short-term and doesn't address what the long-term problem is. And I'm not even sure the policy is a viable solution. It's very important to send the right message: holding Congress accountable and how we need to find long-term solutions to ensure Californians have access to health care.”
Rob Lapsley, co-chair of Californians Against Tax Hikes and president of the California Business Roundtable, argued that the proposed wealth tax would ultimately affect all Californians.
“If the twist is eliminated, this measure requires all California taxpayers, not just billionaires, to file an affidavit of their net worth with the Franchise Tax Board under penalty of perjury,” Lapsley said in a statement. “And it gives the Legislature the power to extend the estate tax to all Californians and all types of property, including home equity and retirement savings, without ever going back to voters, effectively eliminating” voter-approved limits on property tax increases.
Supporters of the tax submitted nearly 1.6 million signatures in April to qualify the proposal for the ballot, about double the number required. However, support for the effort has become increasingly shaky. Newsom's team built a broad coalition of opponents, including health and education activists, who undermined the fundamental argument for the tax.
The union that crafted the proposal responded last week by proposing a legislative alternative that would create a 2% tax on billionaires' assets. The Newsom administration flatly rejected it. No agreement was reached before a Thursday afternoon deadline for the union to withdraw the proposal from the November ballot.
According to the California Secretary of State's office, two efforts that were designed to sink the proposed billionaire tax, called poison pills, also qualified for the Nov. 3 vote. One would prohibit new state taxes on personal property, while the other prohibits any new taxes from being exempt from existing state spending rules and periodically audited. If voters approve the multibillion-dollar tax proposal but any of the other proposals receive more votes, the tax measure would be void.
The proposed billionaires tax would apply to more than 200 Californians, some of whom proactively left the state or moved their businesses out of California because of the proposal.
The prospect of the wealthy fleeing the state is one reason prominent Democrats like Newsom opposed it, given that California's budget depends so much on the state's most prosperous residents.
Sergey Brin, co-founder of Google, is among the billionaires who reportedly moved out of California because of the tax proposal. He donated at least $82 million to an organization funding efforts to overturn the proposed billionaires tax.
Proponents of the ballot measure had a deadline of Thursday night to withdraw their proposals.
Other policy proposals that will appear on the Nov. 3 ballot include:
- Require a government-issued voter ID to cast your vote in elections.
- Reform the California Environmental Quality Act, once a third rail in Democratic politics and which has come under increasing scrutiny in rebuilding after the Palisades and Eaton wildfires.
- Create an $11.3 billion affordable housing bond.
Two notable proposals were removed from the ballot after negotiations between the California Hospital Association. and unions:
- An effort to limit health care executive compensation.
- A union proposal from the same union that supports the multibillion-dollar tax that would have required many health care clinics to spend 90% of their revenue serving low-income and underserved residents.
