California billionaire tax heads to November ballot after deadline passes

A one-time 5% wealth tax on California's more than 200 billionaires will appear on the November ballot after proponents declined to withdraw the measure by the 5 p.m. Thursday deadline.

The "2026 Billionaire Tax Act," proposed by SEIU-United Healthcare Workers West, imposes a one-time 5% levy on taxpayers and trusts with assets exceeding $1 billion, with some exclusions such as real property. Billionaires can spread the payment over five years. The measure qualified after supporters submitted nearly 1.6 million signatures in April — roughly double the number required — and Secretary of State Shirley Weber confirmed last week that enough were valid.

"The measure is needed to prevent the collapse of California healthcare and help fund public education and food assistance programs," the SEIU-UHW said in a statement announcing the campaign's next phase. Proponents project the tax will raise about $100 billion, with 90% directed to healthcare programs and 10% to education and food assistance.

California is home to more than 200 billionaires, more than any other state, according to a group of law and economics professors at UC Berkeley, UC Davis and the University of Missouri who helped draft the proposal. Their collective wealth surged to $2.2 trillion as of October 2025 from $300 billion in 2011, the professors' data show.

The revenue math faces headwinds from behavioral responses

The nonpartisan California Legislative Analyst's Office said in a December analysis that the tax would temporarily increase revenue by tens of billions spread over several years. But if enough billionaires relocate, the state could eventually lose "hundreds of millions of dollars or more per year."

The mobility risk is not theoretical. When Norway raised its top wealth-tax rate by one percentage point in 2022, economist Christine Blandhol documented a wave of business owners leaving for Switzerland, reducing both tax revenue and the output of firms left behind. Within Switzerland's own cantons, where wealth has been taxed since the 1800s at rates from about 0.1% to 0.9%, the wealthy move steadily from high-rate Bern to low-rate Lucerne, research shows.

California's experience with income tax increases offers a parallel. When the state raised its top rate by three percentage points in 2012, Stanford economist Joshua Rauh found that high earners who stayed deferred bonuses, retimed asset sales and restructured compensation, eroding most of the expected revenue gain within two years.

A compromise was proposed and rejected

Last week, the Billionaire Tax Now Coalition urged Governor Gavin Newsom to support a smaller 2% tax on billionaires in lieu of the 5% levy, saying the willingness to compromise "reflects the urgency of the moment and the need to secure funding quickly." Newsom's office rejected the offer.

"The Governor supports making the wealthiest Americans pay their fair share, but this poorly designed state-only measure will defund teachers, schools, clinics, and public safety," Tara Gallegos, a spokesperson for Newsom, said in a statement. "Changing the tax rate doesn't change this measure's fundamental flaws that harm working Californians."

Newsom and other opponents have argued the levy would prompt the ultra-rich, including tech entrepreneurs, to flee to states such as Nevada and Florida, ultimately hurting California's economy. The state budget depends heavily on income taxes from its highest earners, making revenue prone to volatility tied to capital gains, executive bonuses and stock offerings.

The measure now heads to a campaign that will test whether voters in the nation's most populous state — which also has the highest income tax and most expensive housing market — are willing to impose a targeted wealth levy on a group of roughly 200 individuals. The general election is Nov. 3.

This article is for informational purposes only and does not constitute investment advice.