{"id":376932,"date":"2026-06-27T06:10:19","date_gmt":"2026-06-27T06:10:19","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/376932\/"},"modified":"2026-06-27T06:10:19","modified_gmt":"2026-06-27T06:10:19","slug":"what-to-know-about-californias-billionaire-tax-measure","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/376932\/","title":{"rendered":"What to know about California\u2019s billionaire tax measure"},"content":{"rendered":"

A controversial proposal to tax California\u2019s billionaire class and use the money to fund social welfare programs will officially appear on the state\u2019s November ballot, teeing up a battle between the union backing the wealth tax and the powerful players who have sought to kill it.<\/p>\n

Gov. Gavin Newsom, a likely 2028 presidential contender, who has long opposed tax hikes on California\u2019s ultrawealthy, is just one of a host of powerful forces in the Golden State who oppose the plan. The state\u2019s richest residents, many of whom are in Silicon Valley, have spent millions on campaigns designed to erode voter support for the ballot measure.<\/p>\n

But the measure prevailed. The tax well surpassed the state\u2019s voter signature requirement for ballot proposals on June 18 and was solidified<\/a> on the November ballot late Thursday evening after Newsom failed to strike a deal with\u00a0the Service Employees International Union Healthcare Workers West, the labor union behind the measure, before the state\u2019s finalization deadline.<\/p>\n

\u201cThis is not how we should set California\u2019s budget priorities,\u201d Newsom wrote in an article on his Substack<\/a> on Friday morning. \u201cWe can\u2019t let a single advocacy organization, however well-intentioned, write the state\u2019s tax code on its own terms.\u201d<\/p>\n

How the proposed billionaire tax works<\/p>\n

The tax-the-rich approach has long been a pipe dream for progressive Democrats, but it has gained more traction since President Donald Trump signed his marquee tax and spending package into law last year. The One Big Beautiful Bill Act slashed federal spending on Medicaid, cut billions from Affordable Care Act marketplace subsidies and shifted the lion\u2019s share of nutrition assistance program funding onto individual states.<\/p>\n

The measure aims to generate $100 billion in revenue by levying a one-time tax of 5% on billionaires in California. That money would be used across the state to offset the impact of the Trump administration\u2019s sweeping cuts to federal healthcare and nutrition assistance programs.<\/p>\n

The union notes that 90% of the money would be used to sustain local hospitals, clinics and nursing homes that could otherwise face closure amid Medicaid funding cuts. The other 10% would be directed toward public education and state food assistance programs, according to the proposal. The funds would be accumulated and dispersed over multiple years.<\/p>\n

Progressives in Washington, including Sen. Bernie Sanders, I-Vt., and Rep. Ro Khanna, D-Calif., have celebrated the California measure. But in a state like this, where politics are interwoven with an income tax system that relies on high earners and the tech economy, the reality is far more complicated.<\/p>\n

Some labor unions oppose the tax<\/p>\n

A host of labor unions and healthcare advocacy groups that typically align with SEIU-UHW have released statements opposing the group\u2019s billionaire tax proposal. At issue is not whether the ultrawealthy should be taxed, it\u2019s how.<\/p>\n

The groups, which include the California Medical Association and Planned Parenthood Affiliates of California along with teachers and trade unions, have argued that the tax is a short-term fix that could lead to more budget volatility in the long run.<\/p>\n

\u201cCalifornia\u2019s health care system cannot be built on temporary revenue spikes or uncertain funding streams. Patients, providers, and health care programs need reliable, sustainable funding, not a short-term fiscal fix that could ultimately reduce overall state revenues and make future budget shortfalls more severe,\u201d the CMA board of trustees wrote in a statement denouncing the wealth tax.<\/p>\n

The coalitions have also argued that the SEIU-UHW proposal doesn\u2019t provide enough assurance that the tax revenue would actually benefit the state\u2019s most vulnerable populations.<\/p>\n

There are fears billionaires will leave the state<\/p>\n

Newsom argued that a state-level wealth tax would drive billionaires out of California and lead to less income tax revenue in the long run. The state\u2019s budget already relies heavily on income and capital gains taxes collected from high earners, which are used to fund public education and social services.<\/p>\n

\u201cThere is nothing for housing, nothing for childcare, nothing for public safety workers who must answer 911 calls, and nothing for our public universities that have powered California\u2019s economy for a decade,\u201d Newsom said of the billionaire tax proposal.<\/p>\n

\tRecommended<\/p>\n

Then there are the billionaires themselves. Silicon Valley\u2019s biggest names have spent months funneling millions into killing the proposal, including Palantir co-founder Peter Thiel, Google co-founder Sergey Brin, DoorDash CEO Tony Xu and Chris Larsen, co-founder of the crypto company Ripple.<\/p>\n

The New York Times reported in December<\/a> that Thiel, who owns a personal investment firm in Los Angles, was considering other states to move his firm to.<\/p>\n

Palmer Luckey, Oculus founder and co-founder of defense technology startup Anduril, said the tax<\/a> would force \u201cfounders like me to sell huge chunks of our companies to pay for fraud, waste, and political favors for the organizations pushing this ballot initiative.\u201d<\/p>\n

But not all billionaires have rejected the initiative. Nvidia CEO Jensen Huang spoke<\/a> alongside Rep. Ro Khanna, D-Calif., in support of the congressman\u2019s \u201cMake Billionaires Pay Their Fair Share Act\u201d bill.<\/p>\n

Huang even encouraged his peers to move to the state, saying at a Stanford University event in April, \u201cI say to everybody, \u2018Move to California, don\u2019t leave.\u2019 It\u2019s the highest taxes in the world, but it\u2019s OK.\u201d<\/p>\n

Newsom has offered an alternative plan<\/p>\n

Newsom laid out his counterproposal, which came as a detailed plan for imposing a national billionaires tax and amending tax code loopholes, on Friday. <\/p>\n

\u201cA true minimum tax on billionaires \u2014 a modern Buffett Rule \u2014 that ensures the people at the very top pay at least the tax rate their own workers pay,\u201d Newsom wrote. <\/p>\n

The 2028 contender\u2019s proposal included the establishment of a national public equity fund, the money for which would come in the form of artificial intelligence stakes for all Americans. It focused on addressing tax loopholes that allow the top 1% of earners to avoid paying income tax by borrowing against their stock portfolios and writing off charitable donations.<\/p>\n

\u201cWhen 10% of the people in this country own two-thirds of the wealth, when we have minted the first trillionaire in human history, and yet your wages have stagnated, and your healthcare costs have skyrocketed, something is fundamentally broken,\u201d Newsom wrote. <\/p>\n

\u201cOver the decades, the American economy has been engineered for the very top, a story as old as time: Money buys influence, and influence rewrites the rules. Those rewritten rules funnel even more wealth to the few. Under this weight, democracy itself starts to buckle.\u201d<\/p>\n

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\n\t\t\t\t\"\"\t\t\t\t<\/a><\/p>\n

\n\t\t\t\t\t\t\t
\n\t\t\t\t\t\tSydney Carruth<\/a>\t\t<\/p>\n

\n\t\t\t\t\t\tSydney Carruth is a breaking news reporter covering national politics and policy for MS NOW. You can send her tips from a non-work device on Signal at SydneyCarruth.46 or follow her work on X and Bluesky.\t\t<\/p>\n

\"MS<\/p>\n

\u00a9\u00a02026 Versant Media, LLC<\/p>\n

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