California voters are set to decide on a one-time 5% tax on the net worth of the state’s billionaires in November. The secretary of state reported on June 17 that at least 980,438 of the more than 1.6 million signatures filed were valid, qualifying the ballot initiative.
The SEIU-UHW is sponsoring the initiative. The tax would be retroactive and apply to any billionaire residing in the state as of Jan. 1, 2026. The tax would be due with an individual's 2027 tax filings. The initiative would allow individuals to pay the tax in five equal installments beginning in 2027, with each subsequent payment subject to an annual deferral charge of 7.5% of the remaining unpaid balance.
The initiative would create the 2026 Billionaire Tax Reserve Fund, where all taxes, interest, and penalties resulting from the initiative would be deposited. The initiative would fund reductions in federal spending or state appropriations; Medi-Cal and other health coverage programs for low- and moderate-income individuals; health care access, benefits, and services; public education from K-14; and food assistance programs such as CalFresh, CalFAP, CalFood, or California's Universal Meals Program for school meals.
The initiative was endorsed by U.S. Sen. Bernie Sanders (D), U.S. Rep. Ro Khanna (D), California Democratic Socialists of America, Teamsters California, and UNITE HERE Local 11. Emmanuel Saez, an economist at the University of California, Berkeley, and Gabriel Zucman, an economist at the Paris School of Economics, argued in an article that the tax produces a more equitable tax system. They wrote, "From 2019 to 2025, California billionaires' wealth grew an average of over 15 percent per year, while they paid, on average, just 0.26 percent of their wealth annually in state income taxes. Their income tax payments accounted for only 2.4 percent of California's income tax revenue."
Several organizations have come out in opposition to the initiative over the past month, including the California Teachers Association, State Building and Construction Trades Council of California, California YIMBY, and Planned Parenthood Affiliates of California. They join Gov. Gavin Newsom (D), U.S. Rep. Kevin Kiley (R), San Francisco Mayor Daniel Lurie (Nonpartisan), and gubernatorial candidate Steve Hilton (R). Aaron Withe, chief executive officer of the Freedom Foundation, which opposes the measure, said, "SEIU and its enablers call this a healthcare funding measure — a response to federal Medicaid reforms. It isn’t. California already has the highest income tax rates in the nation. Its budget problems aren’t a revenue problem. They’re a spending problem that’s outpaced even California’s substantial tax base for years."
The deadline to qualify or withdraw a ballot initiative in California is June 25 (131 days prior to the election). Politico reported that Gov. Newsom (D) has been trying to negotiate with the union to withdraw the initiative from the ballot before the deadline. Suzanne Jimenez, chief of staff of SEIU-UHW, said the union was “fully open to collaborating on concrete solutions that solve the problems created by Congress.”
Since the law was enacted in 2014, authorizing ballot initiatives to be withdrawn from the ballot, 14 initiatives have been withdrawn after qualification.
Building a Better California, a committee primarily funded by Google co-founder Sergey Brin, is funding two ballot initiatives aimed at nullifying the billionaires' tax. Sponsors filed signatures for the initiatives on May 4. The final random sample counts are due June 24. The initiatives are constitutional amendments that would:
- prohibit the enactment of new taxes after January 1, 2026, on ownership or accumulation of retirement holdings, individually-owned assets, and other forms of personal savings and
- require state laws or ballot initiatives levying a new special tax, which is any tax imposed for specific purposes, enacted after January 1, 2026, to undergo state audits to determine program effectiveness and cost-saving measures.
Eleven ballot initiatives have qualified for the ballot. Including the competing measures to the billionaires' tax, there are four initiatives pending signature verification. On average, 77 ballot initiatives were filed in each even-year election cycle, with nine certified for statewide ballots from 2010 to 2024.
Voters will also be deciding on three measures referred to the ballot by the state legislature. They address vote thresholds for ballot initiatives proposing supermajorities, eliminating the successor election at a state officer recall election, and authorizing public financing for state and local campaigns.
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