2026 California billionaire tax initiative

2026 referendum From Wikipedia, the free encyclopedia

The One-Time Wealth Tax for State-Funded Health Care Programs Initiative, commonly referred to as the California billionaire tax or California wealth tax, is a combined initiated constitutional amendment and state statute proposed for the November 3, 2026, ballot in the state of California.

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2026 California billionaire tax
November 3, 2026
One-Time Wealth Tax for State-Funded Health Care Programs Initiative
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If approved and passed, the state's billionaires would pay a one-time 5% tax on their accumulated wealth to fund health care programs, food assistance and public education. The initiative was sponsored by labor union SEIU United Healthcare Workers West (UHW). It has received support from a number of the state's labor unions, with strong opposition from prominent business leaders.

Background

The initiative was drafted by tax law professors Brian Galle of UC Berkeley, David Gamage of the University of Missouri, Darien Shanske of UC Davis, and economist Emmanuel Saez of UC Berkeley.[1] Saez stated he was inspired to co-author the measure by his research with Gabriel Zucman which showed soaring inequality and billionaires paying lower effective tax rates than middle-class workers.[2] SEIU United Healthcare Workers West (SEIU-UHW) filed the initiative. In December 2025, state attorney general Rob Bonta issued the official title and summary.[3][4]

On April 26, 2026, SEIU-UHW announced that they had collected 1.6 million signatures in support of the tax, nearly double the 874,641 required to qualify for the November ballot.[5][6]

Impact

The initiative would impose the Billionaire Tax Act, a one-time 5% tax on the net worth of the California residents worth over $1 billion.[7] The tax would go towards state-funded healthcare programs, including Medi-Cal, and provide funding for food assistance and public education.[7]

The eligibility cut-off outlined in the initiative was January 1, 2026, meaning that if the initiative is certified for the ballot and passed by voters, billionaires who continued to hold residence in the state of California after that date will be subject to the 5% tax.[7] Six of the state's estimated 214 billionaires claim to have left California before the deadline, including PayPal co-founder Peter Thiel, former Uber CEO Travis Kalanick, and Google co-founders Larry Page and Sergey Brin, though whether any of them exited California as a matter of state tax law is uncertain.[7][8][9] For instance, Brin and Page were reported as "cutting some ties" to California by moving or terminating California limited liability companies, but with both men still maintaining California homes and with their time in the state remaining unclear.[10]

Revenue

Analysis by the California Legislative Analyst's Office found the wealth tax was likely to temporarily increase revenue by up to tens of billions of dollars total, collected over several years.[11] The analysis also found the tax would decrease income tax revenue by hundreds of millions of dollars or more annually due to some billionaires deciding to leave California.[11][12]

SEIU-UHW, the labor union who helped propose the initiative, estimated that the tax would generate $100 billion,[13] though the contributions of the six known billionaires who have claimed to have left the state before the deadline (as discussed above, whether they have actually done so is disputed and uncertain) account for more than a quarter (an estimated $26.775 billion) of that amount.[7][14] Academic Kent Smetters cast doubt on the SEIU-UHW's estimate, telling the Los Angeles Times that the union is "not accounting for the different ways that people can move or reclassify wealth".[15] UC Berkeley economics professor Enrico Moretti warned that the tax "has the potential to completely destroy California's economy", and described the revenue estimate as "way overly optimistic."[2]

The conservative-leaning Hoover Institution estimated that "permanent loss of income taxes from the departing residents indicates a high likelihood that net effect of the Billionaire Tax Act will be negative" by almost $25 billion.[16] This conclusion was criticized by one of the bill's authors, David Gamage, who contended that the group's analysis "suggests that the billionaire tax might raise more revenue than our projections even say".[17]

Effective tax rate

The Tax Foundation, a center-right think tank, argued that it was possible for the effective wealth tax rate to far exceed 5% for some taxpayers due to provisions related to dual-class share structures,[18] but acknowledged that this would be unlikely in cases where valuations are clearly incorrect.[19][20] The initiative's drafters published a report dismissing this concern as a misunderstanding.[19][21]

Real estate

Forbes cited the proposed billionaire tax as the reason for a real estate boom on Nevada's side of Lake Tahoe, noting that a number of lakefront homes were purchased by California billionaires after the proposal was announced.[22] Bill Dietz, a Lake Tahoe realtor, told the magazine that a "clear acceleration of ultra-high-net-worth buyers moving from California to Nevada" took place, driven by "tax strategy".[22]

Campaign

Support

U.S. senator Bernie Sanders, a democratic socialist, has endorsed the billionaire tax. At a February 2026 Los Angeles rally in support of the tax, Sanders described billionaires as "oligarchs of the 18th century...[who] believe they have the divine right to rule".[23] Many prominent supporters have asserted that the billionaire tax is a necessary response to the Trump administration's restrictions and cuts to Medicaid,[24] including former U.S. secretary of labor Robert Reich, who described the tax as a "practical way to keep the healthcare system functioning".[24] Emmanuel Saez, a UC Berkeley economics professor who co-wrote the proposal, said that the tax will "preserve [healthcare and education] programs that are crucial for California's economy".[2]

The state branch of the Democratic Socialists of America endorsed the billionaire tax, stating that it would "fill the hole of federal Medi-Cal cuts coming our way thanks to the fascist Trump regime".[25]

U.S. representative Ro Khanna, a progressive democrat who represents much of the Silicon Valley, has expressed strong support for the tax.[26] Some venture capitalists from his district have responded by backing Khanna's 2026 primary challenger, Ethan Agarwal.[27] Two 2026 Democratic gubernatorial candidates have endorsed the tax – billionaire businessman Tom Steyer and state superintendent of public instruction Tony Thurmond.[26][28]

Opposition

In response to the initiative, activists staged a pro-billionaire protest march in San Francisco on February 7, 2026.[29]

California governor Gavin Newsom has vocally opposed the tax, telling Politico that the proposal "makes no sense" and is "really damaging to the state".[30] A number of Democratic candidates hoping to succeed Newsom in the 2026 gubernatorial election have also opposed the tax, including former U.S. representative Katie Porter, former U.S. secretary of health and human services Xavier Becerra, former Los Angeles mayor Antonio Villaraigosa and San Jose mayor Matt Mahan.[31][26] Leading Republican candidates Chad Bianco and Steve Hilton have expressed opposition to the tax.[32]

Robertas Bakula, an associate fellow at the Ayn Rand Institute, called the tax an "immoral scam" in an opinion piece for the Los Angeles Daily News, arguing that the January 1 eligibility deadline is illegal because the United States Constitution bans retroactive laws.[33] In a February 2026 effort to curb the effects of the eligbility deadline, U.S. representative Kevin Kiley introduced a bill in Congress that would prohibit a state from levying a tax retroactively on people who no longer live in the state.[23]

In May 2026, the editorial board of The Washington Post publicly opposed the tax, which they described as "self-destructive".[34] The board criticized SEIU-UHW and stated that the initiative "has already cost the state more in lost future revenue from income taxes than it would raise".[34]

Building a Better California, an organization co-founded by Sergey Brin and Eric Schmidt that is opposed to the billionaire tax,[35] is seeking to introduce three questions to the November 2026 ballot, all of which are designed to curb the effects of the billionaire tax if it passes.[36] One would invalidate the tax by amending the state constitution to forbid retroactive taxation,[37][23] another would bar new taxes from circumventing rules on education spending requirements for tax revenue,[38][36] and a third would require more audits of special taxes and impose more rules on how revenue from new taxes could be spent.[36][39] Building a Better California raised over USD80 million in the first quarter of 2026, primarily from intrastate billionaires.[36][40]

Other reactions

Nvidia CEO Jensen Huang, who would have to pay roughly $8 billion if the measure passed, stated he was "perfectly fine with it" and had "not thought about it once" when asked if he was concerned about the tax. He added that he and others "chose to live in Silicon Valley, and whatever taxes they would like to apply, so be it".[41][42]

Endorsements

Yes
Executive branch officials
U.S. senators
U.S. representatives
Statewide officials
Local officials
Individuals
Labor unions
Organizations
No
Executive branch officials
U.S. representatives
Statewide officials
State legislators
Local officials
Individuals
Organizations
Newspapers
Declined to endorse
Labor unions

Polling

More information Poll source, Date(s) administered ...
Poll source Date(s)

administered

 Sample

size[c]

 Margin of error Yes No Undecided
Berkeley IGS[86][d] March 9–15, 2026 5109 (RV) ±2.0% 52% 33% 15%
UC Berkeley Citrin Center/Politico[88] February 25 – March 3, 2026 1220 (RV) ±3.0% 50% 28% 23%
The Mellman Group (D)[89][e] January 6–12, 2026 800 (LV) ±3.0% 48% 38% 14%
Nestpoint[90] January 2–12, 2026 907 (LV) ±3.0% 60% 24% 16%
David Binder Research (D)[91] December 6–10, 2025 800 (LV) ±3.5% 55% 39% 6%
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Notes

  1. [a]
    Kiley was elected as a Republican before registering as an independent in 2026.[55]
  2. [b]
    Romero held office as a Democrat, defecting to the Republican Party in 2024.
  3. [c]
    Key:
    A – all adults
    RV – registered voters
    LV – likely voters
    V – unclear
  4. [d]
    Poll sponsored by the Los Angeles Times.[87]
  5. [e]
    Poll sponsored by Kensington Avenue Strategies, a Republican strategy firm.[89]

References

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