A proposed wealth tax on California billionaires has officially qualified for the November ballot, setting the stage for a high-stakes political battle. The measure, which would impose a one-time 5% tax on residents with net worth exceeding $1bn, secured more than double the required signatures to qualify, the secretary of state confirmed on Thursday.
The initiative, known as the California Billionaire Tax Act, is backed by the Service Employees International Union-United Healthcare Workers West (SEIU-UHW). Proponents argue the tax would generate funds for food assistance, education, and healthcare programmes, particularly to offset federal cuts under the Trump administration's One Big Beautiful Bill Act. Suzanne Jimenez, chief of staff for SEIU-UHW, stated: 'Regular working people pay higher effective tax rates than the wealthiest Americans. Asking those who have benefited most from the economy to contribute more is a reasonable step.'
However, the measure faces fierce opposition from Governor Gavin Newsom and Silicon Valley billionaires. Newsom has vowed to quash the initiative, warning that such a tax would 'drive a race to the bottom' and prompt billionaires to flee the state. Last-minute negotiations between Newsom and the union collapsed after the governor rejected a compromise to reduce the tax rate from 5% to 2%.
The tech industry has mounted an aggressive campaign against the proposal, with Google co-founder Sergey Brin among those pouring millions into super political action committees (Super Pacs) to fight it. Other opponents include the California Teachers Association, the State Building and Construction Trades Council of California, the California Medical Association, and Planned Parenthood Affiliates of California, who argue the tax lacks a sustainable funding path and offers no guarantees that the revenue will reach those in need.
Supporters, including Vermont Senator Bernie Sanders and California Congressman Ro Khanna, view the measure as a potential model for a federal wealth tax. Sanders said during a February rally: 'Never before have so few people had so much wealth and so much power. These billionaires are going to learn that we are still living in a democratic society where the people have some power.' The tax would apply retroactively to all billionaires who were California residents as of 1 January 2026. The state is home to approximately 200 billionaires, many of whom have seen their fortunes grow during the AI boom.
