Controversial billionaire tax will appear on November ballot

Advocates of taxes on California billionaires vowed Thursday to push ahead with November ballot measures despite growing opposition from many of the state’s most powerful political forces.

A labor union spent $31 million collecting signatures to put the measure on the ballot to offset federal health care funding cuts that would affect millions of California’s most vulnerable residents. A representative of the campaign backing the ballot measure pushed back against those who oppose the effort because of self-entitled wealthy Californians and well-established Sacramento interests.

“While a few morally bankrupt billionaires and their friends in Sacramento want to close hospitals in California and preserve tax cuts for billionaires — I can assure you the vast majority of voters do not,” said Debru Carthan, a spokeswoman for the Billionaire Tax Now Coalition, which sponsors the bill, the Service Employees International Union-United Healthcare Workers West.

California’s secretary of state is expected to formally approve the measure Thursday evening for a Nov. 3 ballot.

Carthan said his efforts have received support in polls and from lawmakers, unions, community organizations and volunteers across the state, “something billionaires and their friends will never have.”

But a coalition of health, education, public safety, housing, business and labor leaders who opposed the proposal warned it would make the state’s notoriously unstable budget even more unpredictable.

California Medical Assn. “The dangerous wealth tax makes California’s revenue even more volatile, directly threatening vital funds for education and schools, health care and clinics, public safety and infrastructure projects,” said leaders of the California Primary Care Assn. and California School Boards Assn. he said in a statement. “That’s why so many leaders, both Democrats and Republicans, join us and say NO. We look forward to voters knowing the facts, knowing the risks, and resoundingly rejecting this reckless experiment in November.”

Supporters of the proposed one-time 5 percent tax on the assets of the state’s wealthiest residents have touted the effort as a stopgap measure to offset devastating federal health care funding cuts passed by the GOP-led Congress and signed by President Trump nearly a year ago. The federal law is expected to lead to $100 billion in cuts that will affect California’s most vulnerable residents.

The tax proposal, which will be applied retroactively to billionaires living in the state as of January 1, has encountered predictable opposition from the wealthy, especially Silicon Valley technology leaders.

However, this situation divided liberals in particular. While Sen. Bernie Sanders (I-Vt.) and Rep. Ro Khanna (D-Fremont) supported the proposal, Gov. Gavin Newsom was among Democrats who opposed it due to fears about its potential impact on the state’s volatile budget.

Despite being the world’s fourth-largest economy (home to Hollywood and Silicon Valley), California’s budget is highly dependent on the state’s wealthiest residents.

Newsom and others who generally support raising taxes on the wealthiest Americans have argued that the billionaire tax proposed in California is poorly crafted and that such taxes should be enacted nationally because varying state policies would be ineffective.

Opponents have also argued that the political priority in the 2026 midterm elections should be squarely focused on efforts to ensure Democrats regain control of Congress, which would serve as a counterweight to the final two years of Trump’s presidency.

“It’s disappointing. This is a critical election where we must concentrate on undoing the damage done by Trump’s legislation that cuts healthcare funding and turning the house around,” said Jodi Hicks, president and CEO of Planned Parenthood Affiliates of California. A wealth tax “is short-term and does not address the long-term problem. And I’m not even sure this policy is a viable solution. It’s very important to hold Congress accountable and send the right message about how we need to find long-term solutions to ensure Californians have access to health care.”

Rob Lapsley, co-chair of Californians Against Tax Increases and president of the California Business Roundtable, argued that the proposed wealth tax would ultimately affect every Californian.

“Take away the nonsense and this measure would force every taxpayer in California, not just billionaires, to submit a sworn statement of their net worth to the Franchise Tax Board under penalty of perjury,” Lapsley said in a statement. “And it authorizes the Legislature to expand the wealth tax to all Californians and all types of property, including home equity and retirement savings, without going back to voters, effectively eliminating voter-approved caps on property tax increases.”

Supporters of the tax submitted nearly 1.6 million signatures in April to get the proposal on the ballot; This is roughly twice the number required. However, support for the effort gradually weakened. Newsom’s team has assembled a broad coalition of opponents, including health and education activists, who have undermined the central argument for the tax.

The union that drafted the proposal responded last week by proposing a legislative alternative that would impose a 2 percent tax on the billionaire’s assets. It was flatly rejected by the Newsom administration. No agreement was reached by Thursday evening’s deadline for the union to withdraw the proposal from the November ballot.

Two efforts designed to reduce the proposed billionaire tax (the so-called poison pill) have also qualified for the Nov. 3 ballot, according to the California Secretary of State’s office. One prohibits new state taxes on personal property, while the other prohibits new taxes from being exempt from existing government spending rules and regularly audited. If the billionaire’s tax proposal is approved by voters but any of the other proposals receive more votes, the tax measure would be defeated.

The proposed billionaire tax would apply to more than 200 Californians, some of whom are proactively leaving the state or moving their companies out of California because of the proposal.

Given that California’s budget is so dependent on the state’s most prosperous residents, the possibility of wealthy people fleeing the state is among the reasons why prominent Democrats like Newsom oppose it.

Google co-founder Sergey Brin is among billionaires reportedly moving away from California because of the tax proposal. He donated at least $82 million to an organization funding efforts to override the proposed billionaire tax.

Proponents of the ballot measure had until Thursday evening to withdraw their proposal.

Other policy proposals that will appear on the November 3 ballot include:

• Requiring state-issued voter ID to vote in elections.
• Reform of the California Environmental Quality Act, once a third step in Democratic politics and increasingly scrutinized in the rebuilding efforts following the Palisades and Eaton wildfires.
• Creating an $11.3 billion affordable housing bond.

California Hospital Assn. Following the negotiations between the two important proposals, they were withdrawn from the vote. and labor unions:

• Effort to limit healthcare administrators’ salaries.
• A proposal from the same union that supports a billionaire tax that would require many health clinics to spend 90% of their revenues to serve low-income and underserved residents.