A proposed one-time tax on billionaires in California could send some of the wealthiest in the state elsewhere.
Proponents of the 5% tax say it is one of the few ways the state can provide healthcare for its most vulnerable. Opponents argue that it would squash the innovation that has made California rich.
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Earlier this month, my colleagues reported that the Golden State’s richest residents say their success has created unimaginable wealth but also jobs and better lives for Californians, and they are tired of feeling targeted.
“I promise you this will be the final straw,” Jessie Powell, co-founder of the Bay Area-based crypto exchange platform Kraken, wrote on X. “Billionaires will take with them all of their spending, hobbies, philanthropy and jobs.”
Some of them have already decided to take their companies to other states with lower taxes and less regulation. PayPal co-founder Peter Thiel announced on Dec. 31 that his firm had opened a new office in Miami. The same day, venture capitalist David Sacks said he was opening an office in Austin, Texas. California billionaires who are residents of the state as of Jan. 1 would be affected if the ballot measure passes.
The tax proposal would cost the state’s wealthiest residents about $100 billion if a majority of voters support it on the November ballot. In the meantime, the initiative’s backers must gather the signatures of nearly 875,000 registered voters by June 24.
What the billionaires tax calls for
Initiated by the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), the tax measure calls on California billionaires to save the state’s healthcare system from collapse and help fund California public K-14 education and state food assistance programs.
Massive federal funding cuts to healthcare as part of the One Big Beautiful Bill Act put the state in a vulnerable position. The California Budget & Policy Center estimates that as many as 3.4 million Californians could lose Medi-Cal coverage, rural hospitals could shutter and other healthcare services would be slashed unless a new funding source is found.
The billionaires could pay the levy over five years, The Times’ Seema Mehta and Caroline Petrow-Cohen report. Ninety percent would fund healthcare programs and the remaining 10% would be spent on food assistance and education programs.
The chances of the ballot measure passing in November are uncertain, given the potential for enormous spending on campaigns to stop the effort.
Unlike statewide and other candidate races, there is no limit on the amount of money donors can contribute to support or oppose a ballot measure.
Where Newsom stands
Gov. Gavin Newsom has denounced the tax proposal, which does not have unanimous support among the Democrats.
Newsom has consistently opposed state-based wealth taxes throughout his tenure. He reiterated his opposition when asked about the proposed billionaires tax in December.
“You can’t isolate yourself from the 49 others,” Newsom said at the New York Times DealBook Summit. “We’re in a competitive environment. People have this simple luxury, particularly people of that status, they already have two or three homes outside the state. It’s a simple issue. You’ve got to be pragmatic about it.”
The governor opposed two previous ballot measures in 2022 and 2023 that would have raised taxes on the wealthiest Californians.
He wasn’t potentially eyeing a presidential bid during those years, however.
Lorena Gonzalez, president of the California Federation of Labor Unions, called Newsom’s position “an Achilles’ heel” that could irk primary voters in places including the Midwest who are focused on economic inequality, inflation, affordability and the growing wealth gap.
“I think it’s going to be really hard for him to take a position that we shouldn’t tax the billionaires,” said Gonzalez, whose labor umbrella group will consider whether to endorse the proposed tax next year.
Today’s top stories 
A tower glows hot on opening day in 2014 at the Ivanpah Solar Electric Generating System in the Mojave Desert.
(Los Angeles Times)
Why California is keeping this unusual solar plant running when both Trump and Biden wanted it closedCalifornia regulators blocked the shutdown of Ivanpah, one of the world’s largest solar thermal plants, against the wishes of the Biden and Trump administrations.State officials have determined the facility’s power is still needed to meet surging electricity demand from data centers, AI expansion and California’s clean energy goals.Once celebrated as a renewable breakthrough, Ivanpah has faced competition from cheaper solar technology and has been troubled by bird deaths and other issues.Golden Globes 2026Could this mysterious news site influence California’s 2026 election?A mysterious news site called the California Courier is flooding Facebook with conservative-leaning stories attacking Democrats.The site refuses to disclose its ownership or funding but appears to be linked to conservative groups including the Lincoln Club of Orange County.It’s part of a nationwide “pink slime” network of fake-looking local news sites designed to influence elections.‘Doomsday Plane’ appearance at LAX sparks online worryThe federal government’s Boeing E-4B Nightwatch touched down at LAX this week in what may be the famed aircraft’s first-ever LAX landing.The plane is equipped to serve as an airborne operations center for the president, the Defense secretary and the Joint Chiefs of Staff in the event of a disaster that wipes out command centers on land.Its sudden appearance at a busy commercial airport sparked a flurry of online speculation.What else is going onCommentary and opinionsThis morning’s must readOther must readsFor your downtime 
Buridda, also known as zuppa di mare, is a traditional Ligurian soup crowded with seafood. It’s one of chef and owner Gianba Vinzoni’s signature dishes at Cinque Terre West restaurant in Venice.
(Genaro Molina / Los Angeles Times)
Going outStaying inAnd finally … your photo of the day 
Teyana Taylor stunned in a custom Schiaparelli gown on the red carpet at the 2026 Golden Globes.
(Christina House / Los Angeles Times)
Today’s great photo is from Times photographer Christina House, who was on the red carpet at the 2026 Golden Globes.
Have a great day, from the Essential California team
Jim Rainey, staff reporter
Hugo Martín, assistant editor, Fast Break desk
Kevinisha Walker, multiplatform editor
Andrew Campa, Sunday writer
Karim Doumar, head of newsletters
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