California Considers One-Time Billionaire Wealth Tax Ballot Measure

Proposed Tax Targets Billionaires in California

A proposed ballot initiative in California would impose a one-time 5% tax on the wealth of the state’s estimated 255 billionaires, according to the measure’s text and the California attorney general. If approved by voters, the tax would apply only to wealth, not to income, and would be collected from affected residents in 2027.

Origins and Structure of the Billionaire Wealth Tax

The proposed billionaire wealth tax was created by the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), a union that represents more than 120,000 health care workers and patients in California. The measure specifies that the 5% levy would be applied to certain categories of assets, including businesses, securities such as stocks and bonds, art, collectibles, and intellectual property. Real estate and some pensions and retirement accounts would be excluded from the tax.

The proposal allows billionaires who are subject to the tax to choose between paying the full amount in 2027 or spreading payments over five years. Those who opt for installment payments would incur an additional annual nondeductible charge of 7.5% of the remaining unpaid balance, as outlined in the proposal’s language.

Stated Purpose and Planned Use of Revenue

The proposal states that about 90 cents of every dollar raised by the billionaire wealth tax would be devoted to health care. The remaining 10 cents would be earmarked for food assistance or education programs. The measure cites an impetus linked to a federal tax and spending law backed by Republicans, which it describes as including approximately $1 trillion in spending cuts to Medicaid over the next decade.

According to the proposal, Medi-Cal, California’s Medicaid program, is projected to lose $190 billion in funding over the next decade due to those cuts. The text of the measure states that the purpose of the 2026 Billionaire Tax Act is to protect access to high-quality, equitable health care and to support funding for kindergarten through grade fourteen public education and food assistance programs by raising revenue from a one-time tax on billionaire wealth.

Estimated Fiscal Impact for the State

A December 11 analysis by California’s nonpartisan Legislative Analyst’s Office stated that the state would likely raise “tens of billions of dollars” from the proposed wealth tax. The analysis noted that the exact amount is difficult to quantify because it depends on actions billionaires might take to reduce their tax burden and on fluctuations in stock prices that affect the value of their holdings.

Approval Process and Ballot Requirements

To reach voters, the billionaire wealth tax measure must first collect enough signatures to qualify for the California ballot. Ballotpedia has put the required number of signatures at about 875,000. If it gathers sufficient valid signatures, the measure would appear on the statewide ballot in the November general election. Under California’s rules, the proposal would take effect only if it receives majority approval from voters.

Positions of Public Figures and Stakeholders

California Governor Gavin Newsom has previously opposed earlier wealth tax proposals in the state, stating that the idea is “going nowhere in California.” Billionaire hedge fund manager Bill Ackman, who resides in New York, expressed opposition to the California proposal in a December 29 social media post. In that post, he wrote that he is opposed to wealth taxes, which he described as representing an expropriation of private property and having negative consequences in countries where they have been introduced.

Omar Ocampo, a researcher at the Institute for Policy Studies, commented on the proposal by noting that, in his view, the billionaire class had their wealth nearly triple in the last six years and that a one-time 5% wealth tax would only place a limited constraint on that accumulation. His remarks emphasized that, according to his assessment, the tax would not significantly affect billionaires’ lives or spending habits.

Related Developments Involving Wealthy Investors

Separate from the tax measure itself, some high-profile investors have recently announced business moves involving California and other states. On December 31, tech billionaire Peter Thiel announced that his private investment firm, Thiel Capital, has opened a Miami office. The statement on the move said the new Miami location will complement Thiel Capital’s existing operations in Los Angeles, California, and did not mention the proposed wealth tax.

Also on December 31, Craft Ventures, a venture capital firm co-founded in 2017 by billionaire tech investor David Sacks, stated that it had opened a new office in Austin, Texas. The firm added that Sacks, who serves as a White House adviser on artificial intelligence and cryptocurrency, relocated to Austin earlier in December from San Francisco. The firm’s statement did not reference the proposed California billionaire wealth tax.