One of the leading candidates for California governor is Tom Steyer. <\/p>\n
While the self-described philanthropist\/political activist\/environmental advocate is focused on making California more affordable, Steyer earns skepticism over his wealth; he is a billionaire. He accumulated his fortune of an estimated $2.4 billion as a Wall Street investor and hedge fund manager. <\/p>\n
With the primary only a few weeks away and early voting already underway, Californians will decide whether Steyer has what it takes to fill Gov. Gavin Newsom\u2019s shoes. <\/p>\n
Voters from the Golden State are also set to consider whether the California Billionaire Tax Act should be enacted. <\/p>\n
Steyer hasn\u2019t broken a sweat over this idea. In fact, he has pushed for the ultrawealthy like him to pay more in taxes, as he wrote in one Substack<\/a> post. But he did have one criticism for the proposal, calling it \u201ca temporary fix to a permanent, structural problem.\u201d<\/p>\n Their proposal seeks to establish a one-time wealth tax of 5% on individuals or married couples with certain assets exceeding $1 billion. <\/p>\n Additionally, it would be imposed on anyone residing in California as of Jan. 1, 2026. <\/p>\n Chester Spatt, professor of finance at Carnegie Mellon University who served as chief economist of the U.S. Securities and Exchange Commission in the early 2000s, also raised concerns about the design. <\/p>\n \u201cYou\u2019re telling people they should leave just because of the possibility that it might get adopted,\u201d he said. <\/p>\n How would the billionaire wealth tax work? <\/p>\n National Taxpayers Union Foundation\u2019s Andrew Wilford called the proposal \u201can unprecedented type of tax.\u201d<\/p>\n \u201cWe\u2019ve never had a state do something like this before,\u201d he said. <\/p>\n A wealth tax is imposed on a person\u2019s total net worth, including any assets they own \u2014 including homes, businesses and stocks \u2014 less any liabilities. <\/p>\n The proposal is in response to the Trump administration\u2019s One Big, Beautiful Bill legislation, which took measures to reform medical provider tax schemes.<\/p>\n \u201cStates inflate their Medicaid spending to receive a larger match from the federal government,\u201d Wilford explained. <\/p>\n States tax medical facilities, like hospitals, at higher rates, then those higher costs are built into Medicaid reimbursements from the federal government. The states get more tax revenue while promising the medical providers it would come out of their pockets, but federal taxpayers instead. <\/p>\n \u201cThe mechanics of it are sort of complicated, but the end result is that states are able to receive a larger match from the federal government without actually really spending anything more,\u201d Wilford said. <\/p>\n The One Big, Beautiful Bill tried to reduce the amount states can tax and then ask for back, resulting \u201cin California being set to receive a lower federal Medicaid match,\u201d added Wilford. The one-time billionaire tax seeks to fill in that gap. <\/p>\n Service Employees International Union-United Healthcare Workers West, a labor union for healthcare workers in California, launched a ballot initiative ahead of the November 2026 election cycle. <\/p>\n SEIU-UHW submitted 1.55 million signatures on April 27 to qualify for the ballot. <\/p>\n \u201cThe immense and growing fortunes of billionaires bring privileges inaccessible to most. Whereas nurses, teachers, firefighters, and tech workers alike pay taxes on nearly all of their earned income, billionaires can shield enormous sums from taxation,\u201d the initiative states.<\/a> \u201cTheir primary assets \u2014 stocks, businesses, real estate \u2014 grow in value year after year, but because this growth is taxed only at sale and billionaires often need not sell, they pay no tax on their rising fortunes.\u201d<\/p>\n It\u2019s worth noting that this isn\u2019t the first time SEIU has backed such an idea. The national organization also endorsed Massachusetts Sen. Elizabeth Warren\u2019s Ultra-Millionaire Tax Act, which is an annual wealth tax, as well as Vermont Sen. Bernie Sanders\u2019 Medicare-for-All funding proposals. Neither bill advanced in Congress. <\/p>\n The proposal is already leading to migration out of California<\/p>\n Wilford argued that the retroactive nature of the billionaire tax is \u201calmost certainly unconstitutional.\u201d<\/p>\n Although the clause was envisioned as a way to prevent billionaires from avoiding the tax, \u201cwe\u2019ve already seen several California billionaires leave.\u201d <\/p>\n \u201cThe supporters of this are saying they\u2019ll raise $100 billion in revenue,\u201d said Wilford before noting that the number is too high. <\/p>\n