Controversial billionaire tax will appear on November ballot

Proponents of a tax on California billionaires vowed on Thursday to move forward with their November ballot measure despite mounting opposition from many of the state’s most powerful political forces.

A labor union spent $31 million gathering signatures to qualify the measure for the ballot in an effort to offset federal healthcare funding cuts that will affect millions of California’s most vulnerable residents. A representative for the campaign supporting the ballot measure pushed back at opposition to the effort as self-entitled wealthy Californians and entrenched Sacramento interests.

“While a few morally bankrupt billionaires and their buddies in Sacramento want to see California’s hospitals close, and tax breaks for billionaires protected — I assure you, the vast majority of voters do not,” said Debru Carthan, a spokesperson for the Billionaire Tax Now Coalition, which is funded by the Service Employees International Union-United Healthcare Workers West, the sponsor of the proposal.

The California secretary of state is expected to officially certify the measure for the Nov. 3 ballot on Thursday evening.

Carthan said their effort has support in public opinion polls, and from lawmakers, unions, community organizations and volunteers across the state, “something the billionaires and their buddies will never have.”

However, a coalition of healthcare, education, public safety, housing, business and labor leaders opposed to the proposal warned that it would make the state’s notoriously unstable budget even more unpredictable.

“The dangerous wealth tax directly threatens vital funding for education and schools, healthcare and clinics, public safety, and infrastructure projects by making California’s revenue even more volatile,” the leaders of the California Medical Assn., the California Primary Care Assn. and the California School Boards Assn. said in a statement. “That’s why so many leaders – both Democrats and Republicans – are joining us and saying NO. We look forward to ensuring voters have the facts, know the stakes, and resoundingly reject this reckless experiment in November.”

Supporters of the one-time proposed 5% tax on the assets of the state’s wealthiest residents pitched the effort as a stop-gap measure to offset devastating federal healthcare funding cuts passed by the GOP-led Congress and signed by President Trump nearly one year ago. The federal legislation is expected to result in $100 billion in cuts that would affect California’s most vulnerable residents.

The proposed tax, which would be retroactive to billionaires who lived in the state as of Jan. 1, drew predictable opposition from the wealthy, notably 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 the Democrats who opposed it because of fears about the potential impact on the state’s volatile budget.

Despite being the fourth largest economy in the world — the home of Hollywood and Silicon Valley — California’s budget is extremely dependent on the state’s most prosperous residents.

Newsom and others who generally support increasing taxes on the wealthiest Americans also argued that the proposed billionaire tax in California was poorly crafted and that any such levies ought to be enacted nationally, because varying state policies would be ineffective.

Opponents also argued that the political priority in the 2026 midterm election should be squarely focused on efforts to make sure Democrats regain control of Congress to serve as a counter balance during the final two years of Trump’s presidency.

“It’s disappointing. This is a critical election where we need to concentrate on flipping the house and undoing the damage that was done” by Trump’s legislation that led to the healthcare funding cuts, said Jodi Hicks, chief executive and president of Planned Parenthood Affiliates of California. The wealth tax “is short term and doesn’t address what is the long-term problem. And I’m not even sure the policy is a viable solution. It’s so critical to be sending the right message — holding Congress accountable and how we need to find long-term solutions to make sure Californians have access to healthcare.”

Rob Lapsley, co-chair of Californians Against Tax Increases and president of the California Business Roundtable, argued that the proposed wealth tax would ultimately affect every Californian.

“Strip away the spin, and this measure forces every California taxpayer, not just billionaires, to file a sworn declaration of their net worth with the Franchise Tax Board under penalty of perjury,” Lapsley said in a statement. “And it hands the Legislature the power to extend the wealth tax to all Californians and every kind of property, including home equity, retirement savings without ever returning to the voters – effectively gutting” voter-approved caps on property tax increases.

Supporters of the tax submitted nearly 1.6 million signatures in April to qualify the proposal for the ballot, roughly double the number required. However, support for the effort has grown increasingly shaky. Newsom’s team created a broad coalition of opponents, including healthcare and education activists, that undercut the foundational 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 billionaire’s assets. It was flatly refused by the Newsom administration. No deal was reached by the Thursday evening deadline for the union to withdraw the proposal from the November ballot.

Two efforts that were crafted to sink the proposed billionaire tax — dubbed as poison pills — also qualified for the Nov. 3 ballot, according to the California Secretary of State’s office. One would bar new state taxes on personal property, while the other prohibits any new taxes being exempted from existing state spending rules and to be regularly audited. If the billionaire tax proposal is approved by voters but either of the other proposals receives more votes, the tax measure would be voided.

The proposed billionaire tax would apply to more than 200 Californians, some of whom proactively left the state or moved their companies out of California because of the proposal.

The prospect of the wealthy fleeing the state is among the reasons that prominent Democrats such as Newsom opposed it, given California’s budget being so reliant on the state’s most prosperous residents.

Sergey Brin, a co-founder of Google, is among the billionaires who have reportedly moved out of California because of the tax proposal. He donated at least $82 million to an organization that is funding efforts to invalidate the proposed billionaire tax.

Ballot measure proponents had a Thursday evening deadline to withdraw their proposals.

Other policy proposals that will appear on the Nov. 3 ballot include:

• Requiring government-issued voter identification to cast ballots in elections.
• Reforming the California Environmental Quality Act, once a third-rail in Democratic politics that has become increasingly scrutinized in the rebuilding in the aftermath of the Palisades and Eaton wildfire.
• Creating a $11.3-billion affordable housing bond.

Two notable proposals were pulled off the ballot after negotiations between the California Hospital Assn. and labor unions:

• An effort to limit healthcare executives’ compensation.
• A union proposal by the same union backing the billionaire tax that would have required many healthcare clinics to spend 90% of their revenue to serve low-income and underserved residents.