California's November Ballot Puts a One-Time 5% Wealth Tax on the State's Billionaires
California voters will decide on the 2026 Billionaire Tax Act on the November 3 ballot, a measure that would impose a one-time 5% tax on the net worth of the state's roughly 200 billionaire residents, based on wealth held as of January 1, 2026. Payments would be spread over five years. The measure is sponsored by the labor union SEIU United Healthcare Workers West and backed by Rep. Ro Khanna, D-Calif., and its architects say it would raise about $100 billion for Medi-Cal, food assistance and public education between 2027 and 2031. It qualified for the ballot on June 17 after collecting more than 875,000 valid signatures, well above the required threshold.
Governor Gavin Newsom, who cannot run for reelection, has spent months personally lobbying against the measure, including meeting directly with SEIU's president, even as the California Democratic Party's executive board voted to endorse it. At least one billionaire has already spent $82 million trying to defeat the initiative, and business groups including the California Business Roundtable have mobilized in opposition. California's nonpartisan Legislative Analyst's Office projects the tax would raise tens of billions of dollars in the short term but reduce ongoing state income tax revenue by hundreds of millions of dollars annually if billionaires relocate to avoid it.
The proposal has become a live economic debate beyond California's borders. Stanford economist Joshua Rauh and UC Berkeley economist Emmanuel Saez publicly debated the measure's tradeoffs at a Stanford economic summit this year, disagreeing over whether wealthy residents would actually leave the state and how much revenue the tax would ultimately generate once behavioral responses are factored in.
What supporters say:
Backers argue billionaires' fortunes grow mostly through unrealized capital gains that go untaxed for years, and a one-time levy captures some of that value while funding healthcare, food assistance and schools.
SEIU-UHW and allied unions frame the measure as a direct response to federal Medicaid funding cuts, arguing the roughly $100 billion raised would offset losses without raising taxes on anyone below the $1 billion threshold.
What critics say:
Governor Newsom, business groups and economists including Stanford's Joshua Rauh warn the tax could drive billionaires and the companies they run out of California, shrinking the tax base the state already depends on.
The state's own Legislative Analyst's Office found the measure would cut ongoing income tax revenue by hundreds of millions of dollars a year if wealthy residents relocate, a risk critics say undercuts the promised $100 billion windfall.
Opponents argue taxing wealth based on a person's holdings on a single date, rather than income actually earned, invites years of costly litigation that could tie up any revenue before it reaches state programs.
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Sources:
#WealthTax #California #Billionaires #Election2026 #TaxPolicy
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