California billionaire tax proposal garners enough signatures to head to ballot | California
Supporters of a proposal to impose a one-time tax on California billionaires say they have gathered enough signatures to get the measure to a vote in November.
The campaign claims to have collected more than 1.5 million signatures, according to a press release.
The proposal sparked a political uproar in Silicon Valley, with tech titans threatening to leave the state and the governor, Gavin Newsom, opposing the proposal.
The measure imposes a one-time 5% tax on billionaires’ assets — including stocks, artwork, businesses, collectibles and intellectual property — to offset cuts in federal funding for health care services for low-income people signed by Donald Trump last year. The tax is sponsored by the Service Employees International Union-United Healthcare Workers West and would apply retroactively to billionaires living in the state starting Jan. 1.
California has more billionaires than any other state – a few hundred, by some estimates. Nearly half of the revenue from the personal income tax, the financial backbone of its nearly $350 billion budget, comes from the top 1 percent of earners.
More than 870,000 signatures were needed for the measure to qualify for the ballot.
Tech billionaires fought the proposal by making large donations to the campaign against it, including current and former executives from Google, DoorDash, Reddit, LinkedIn and Facebook.
Alphabet Chairman Sergey Brin has donated at least $45 million to a Super Pac dedicated to blocking the tax. Former Alphabet CEO Eric Schmidt donated more than $3 million.
The proposal has created a deep divide between Newsom and prominent members of his party’s progressive wing, including Bernie Sanders, the Vermont senator who endorsed the measure and said it should serve as a model for other states.
“Our nation will not prosper if so few have so much while so many have so little,” Sanders said on X.
Another supporter, and potential Newsom rival in 2028, is Ro Khanna, the Democratic representative who has mocked billionaires for threatening to flee over a tax intended to provide health care to low-income people.
Newsom has long opposed state-level wealth taxes, believing such levies would be disadvantageous to the world’s fourth-largest economy. At a time when California is cash-strapped and he is considering a 2028 presidential run, he is trying to block the proposal before it reaches the ballot.
Analysts estimate that an exodus of billionaires could result in a loss of hundreds of millions of taxpayer dollars.
“That’s one reason Newsom’s path to the Democratic nomination won’t be easy,” said Jack Pitney, a political scientist at Claremont McKenna College. “He is already facing a [budget] a deficit whose scale is uncertain… and in the years to come, a tax on billionaires which could have the opposite effect.”
The main promoter of this measure, the Service Employees International Union, considers the threat of exodus to be exaggerated.
The tax is a “viable response to a crisis created by Congress,” Suzanne Jimenez, chief of staff for SEIU-United Healthcare Workers West, said in a statement. She added that this would “keep emergency rooms open, hospitals staffed and health systems functioning.”
The California Business Roundtable, meanwhile, is leading a push to defeat the measure, saying it would “hurt our economy, decimate the state budget, drive investment out of the state, and ultimately make daily life more expensive for working families.”
