California’s billionaire wealth tax plan stirs debate

A landmark proposal that could impose a one-time 5% wealth tax on approximately 255 billionaires in California is under debate and may head to a vote in November.

The 2026 Billionaire Tax Act aims to generate tens of billions of dollars. It details that 90 cents of every $1 received will fund healthcare, and the remaining 10 cents will support education or food assistance.

SEIU-UHW says the billionaire tax responds to Republicans’ “big, beautiful” tax-and-spending law, which cuts roughly $1 trillion from Medicaid nationally, including an estimated $190 billion reduction to California’s Medi-Cal over the next decade, per the proposal.

Supporters argue that the ultra-wealthy can easily absorb the cost without impacting their lifestyle. The tax would likely apply to their businesses, stocks, bonds, IP, art, and collectibles. Real estate and pension accounts would be excluded.

Opponents, including Governor Gavin Newsom, say the proposal is highly improbable to take effect. It would need at least 875,000 signatures to qualify for the November ballot, leaving the final decision up to the Golden State voters.

Critics also warn the tax would drive billionaires out of the state. California residents, like Google co-founder Larry Page, reportedly incorporated some of their companies in Florida recently. Venture capitalists Peter Thiel and David Sacks opened offices elsewhere.

If the act is passed, billionaires would have to start paying the tax in 2027 and can spread it across five years.

Not the first
Massachusetts imposed a 4% tax on millionaires in 2023 and used the revenue to fund free school meals.