A proposal to hit billionaires with a new tax in California is nowhere close to becoming reality, but some of the state’s richest residents, lawmakers and labor groups are already clashing over it.Healthcare labor group SEIU-United Healthcare Workers West has filed a proposed ballot initiative that would impose a one-time, 5% tax on California residents with assets worth at least $1 billion in order to help with healthcare costs.(Video above: California Rep. Ro Khanna calls for oversight on state spending.)The California secretary of state last week cleared the measure to begin collecting signatures to try to qualify for the 2026 November ballot. The proposal needs 874,641 valid signatures from registered California voters by June 24 in order to qualify. Wealth taxes have been floated over the years, and each one so far has been a non-starter for Gov. Gavin Newsom. The latest one is no exception. in November, the governor set up a formal campaign called “Stop the Squeeze” to raise money to fight the measure. California has a progressive tax system and the largest state budget in the nation at $321 billion this year. The state relies on the state’s top 1% of earners for about half of the state’s total income tax revenue. State leaders have been grappling with budget deficits, with significant shortfalls expected in the years to come. SEIU-UHW has said the tax would raise about $100 billion and help with expected funding gaps created by the federal budget bill known as HR1 that made steep healthcare cuts. California has struggled to pay for healthcare promised to lower-income undocumented people. After underestimating how much it was going to cost by billions, the governor and lawmakers limited the program in years to come. This angered labor and immigration groups along with some Democratic lawmakers. The wealth tax issue has sparked fierce debate on X and talk of billionaires fleeing the state. The New York Times reported Google co-founder Larry Page and co-founder of PayPal Peter Thiel are considering leaving California. Venture capitalist and San Francisco resident David Sacks posted on X this week, “After blindly funding the Left for years, Silicon Valley is finally realizing what time it is. Dinner time. And they’re on the menu.” Some other Democratic lawmakers in and out of state are pushing back. Progressive Vermont Sen. Bernie Sanders released a statement Tuesday saying the measure “would provide the necessary funding to prevent over 3 million working class Californians from losing the health care they currently have.” He also called it “a model that should be emulated throughout the country.” Bay Area Congressman Ro Khanna posted his support for the new tax on X this week, which sparked outrage from some of his Silicon Valley constituents who raised concerns about the state’s handling of money when it comes to fraud and government waste. Khanna then announced a push for more oversight into state spending while still pushing for the new tax. “There needs to be full accountability for the waste and new leadership in Sacramento,” Khanna post directed toward venture capitalists Chamath Palihapitiya, Jason Calacanis and David Frieberg. “Taxpayers are owed an accounting of where every penny of their tax dollars are going –a detailed receipt,” Khanna wrote.Republican Rocklin Rep. Kevin Kiley said he worries this could drive more people out of the state. “The insane “wealth tax” being proposed would cause innovators to leave California when we’re already #1 in unemployment. This would also collapse our state’s shaky finances,” Kiley posted on X. See more coverage of top California stories here | Download our app | Subscribe to our morning newsletter | Find us on YouTube here and subscribe to our channel

SACRAMENTO, Calif. —

A proposal to hit billionaires with a new tax in California is nowhere close to becoming reality, but some of the state’s richest residents, lawmakers and labor groups are already clashing over it.

Healthcare labor group SEIU-United Healthcare Workers West has filed a proposed ballot initiative that would impose a one-time, 5% tax on California residents with assets worth at least $1 billion in order to help with healthcare costs.

(Video above: California Rep. Ro Khanna calls for oversight on state spending.)

The California secretary of state last week cleared the measure to begin collecting signatures to try to qualify for the 2026 November ballot. The proposal needs 874,641 valid signatures from registered California voters by June 24 in order to qualify.

Wealth taxes have been floated over the years, and each one so far has been a non-starter for Gov. Gavin Newsom. The latest one is no exception. in November, the governor set up a formal campaign called “Stop the Squeeze” to raise money to fight the measure.

California has a progressive tax system and the largest state budget in the nation at $321 billion this year. The state relies on the state’s top 1% of earners for about half of the state’s total income tax revenue.

State leaders have been grappling with budget deficits, with significant shortfalls expected in the years to come. SEIU-UHW has said the tax would raise about $100 billion and help with expected funding gaps created by the federal budget bill known as HR1 that made steep healthcare cuts. California has struggled to pay for healthcare promised to lower-income undocumented people. After underestimating how much it was going to cost by billions, the governor and lawmakers limited the program in years to come. This angered labor and immigration groups along with some Democratic lawmakers.

The wealth tax issue has sparked fierce debate on X and talk of billionaires fleeing the state. The New York Times reported Google co-founder Larry Page and co-founder of PayPal Peter Thiel are considering leaving California.

Venture capitalist and San Francisco resident David Sacks posted on X this week, “After blindly funding the Left for years, Silicon Valley is finally realizing what time it is. Dinner time. And they’re on the menu.”

Some other Democratic lawmakers in and out of state are pushing back. Progressive Vermont Sen. Bernie Sanders released a statement Tuesday saying the measure “would provide the necessary funding to prevent over 3 million working class Californians from losing the health care they currently have.” He also called it “a model that should be emulated throughout the country.”

Bay Area Congressman Ro Khanna posted his support for the new tax on X this week, which sparked outrage from some of his Silicon Valley constituents who raised concerns about the state’s handling of money when it comes to fraud and government waste. Khanna then announced a push for more oversight into state spending while still pushing for the new tax.

“There needs to be full accountability for the waste and new leadership in Sacramento,” Khanna post directed toward venture capitalists Chamath Palihapitiya, Jason Calacanis and David Frieberg. “Taxpayers are owed an accounting of where every penny of their tax dollars are going –a detailed receipt,” Khanna wrote.

Republican Rocklin Rep. Kevin Kiley said he worries this could drive more people out of the state. “The insane “wealth tax” being proposed would cause innovators to leave California when we’re already #1 in unemployment. This would also collapse our state’s shaky finances,” Kiley posted on X.

See more coverage of top California stories here | Download our app | Subscribe to our morning newsletter | Find us on YouTube here and subscribe to our channel