Supporters of a multibillion-dollar tax said Sunday they had gathered nearly twice as many signatures as needed to qualify the controversial proposal for the November vote.
Opponents of the proposal argue that it has already pushed wealthy Californians, crucial to funding the state's volatile budget, to other parts of the nation. However, advocates say the proposed tax is critical to offsetting cuts in federal health care funding that will hurt the state's most vulnerable residents.
“Most Californians and most billionaires recognize how reasonable and necessary this proposal is, both to keep emergency rooms open and to prevent California businesses from closing,” said Suzanne Jimenez, chief of staff for the Service Employees International Union-United Healthcare Workers of the West, the lead proponent of the initiative. “A very small group of the most controversial billionaires on the planet tried to stop” this effort, he added, but when “our growing coalition submits these signatures, David will have won the first round against Goliath.”
The union, which represents more than 120,000 healthcare workers, patients and consumers, launched the effort to counter the massive cuts to healthcare funding that President Trump signed last year. The California Budget and Policy Center estimated that up to 3.4 million Californians could lose Medi-Cal coverage, rural hospitals could close and other health care services would be cut unless new funding was found.
The proposal would impose a flat tax of up to 5% on taxpayers and trusts with assets valued at more than $1 billion, with some exclusions, such as property. The tax could be paid in five years. Ninety percent of the revenue would fund health care programs and the remaining funds would be spent on food assistance and educational programs. The proposal would cost the state's wealthiest residents about $100 billion if a majority of voters support it.
Supporters must submit the signatures of nearly 875,000 registered voters to county election officials by June 24. They say they have gathered almost 1.6 million signatures.
Opponents of the measure, which has divided liberals (Sen. Bernie Sanders (I-Vt.) supports it, while Democratic California Gov. Gavin Newsom opposes it), said the proposal would destroy California's economy and budget, while doing nothing to address the state's underlying financial problems.
“This wealth tax would have a devastating impact on our economy, the state budget and the cost of living for all Californians,” said Rob Lapsley, president of the California Business Roundtable, a bipartisan group. “The measure does nothing to reduce the state's budget deficit of more than $35 billion and does nothing to address the decade of overspending that led to the structural deficit. In fact, because the state relies so heavily on tax revenue from high-income earners, this measure could lead to reduced budget revenues in the long run as wealthy, highly mobile individuals leave the state to avoid this new tax.”
He also argued that the proposal could result in higher taxes for all Californians.
“This is a tax on everyone called the billionaire tax,” Lapsley said, “and we will make sure Californians understand the truth about the devastating consequences this initiative will have.”
