California’s campaign to impose a new wealth tax has re-emerged as a ballot initiative dubbed the 2026 Billionaire Tax Act, sponsored by labor and health care groups including SEIU-United Healthcare Workers West. If qualified by signature, it would go before voters in November 2026. The proposal would impose a one-time 5 % tax on individuals with a net worth exceeding $1 billion, calculated on worldwide assets as of a set valuation date. Revenue would be earmarked primarily for health care (about 90 %), with a smaller share for education and food assistance programs. The tax could be paid in a lump sum or spread over five years.
Supporters argue the measure is designed to fill multibillion-dollar funding gaps caused by federal cuts to health and human services — particularly Medicaid and food assistance — and to ensure that ultra-wealthy Californians who often avoid tax on unrealized gains contribute to state needs.
Political Fault Lines And Support
The initiative has created clear fractures within California’s political landscape. Progressive voices such as Sen. Bernie Sanders have endorsed the measure, viewing it as a way to address inequality and underfunded public services. Meanwhile, Gov. Gavin Newsom has publicly opposed it, warning that targeting billionaires could harm the state’s economic climate.
Some elected officials sympathetic to the idea — like Rep. Ro Khanna — support the tax but argue for protections or exemptions for founders of illiquid startups who could face liquidity challenges paying such a levy.
Opposition And Fears Of An Exodus
High-profile critics among the ultra-wealthy and their allies have sounded stark warnings. Billionaire hedge fund manager Bill Ackman has labeled the tax an “expropriation of private property,” saying it could deter investment and damage economic prospects.
Tech leaders, including Google co-founder Larry Page, Palantir cofounder Peter Thiel, and others, have publicly signaled they might leave California if the tax passes. Some critics describe the measure as punitive and argue it could sap the state’s innovation engine, with founders forced to sell equity or assets simply to meet the tax bill.
Those opposition voices extend beyond tech. Some commentators warn the rhetoric around the tax is fueling social division and fear of a class war, with ultra-rich residents portrayed as targets unfairly punished for their success.
Counterarguments From Supporters And Neutral Observers
Not all observers agree that a wealth tax would trigger a mass departure of billionaires. Some experts and commentators note that historically, wealthy individuals rarely relocate solely due to wealth taxes and that the measure’s design includes options for tax payment flexibility. Others point out that billionaires already pay a high share of state taxes relative to their small numbers and question why raising more from them is so controversial.
Supporters also stress that the ballot initiative has not yet qualified for the ballot; signatures must be collected and verified before it can proceed.
Legal And Constitutional Challenges Ahead
Beyond political opposition, the measure faces potential constitutional hurdles. Legal analysts note questions about whether taxing worldwide wealth, applying the tax retroactively to people who lived in the state at the beginning of the year, or singling out a narrow class of taxpayers could invite court challenges under the U.S. or California Constitutions.
What’s Next
Proponents continue to gather signatures to meet the threshold for the November 2026 ballot. Opponents are ramping up campaigning both in public statements and legal analysis, arguing the tax could accelerate the out-migration of business founders and harm long-term revenue. The debate shows no signs of cooling as California grapples with funding shortfalls and rising inequality.
