California voters are preparing to decide on a proposed one-time wealth tax on billionaires, a measure that has sparked deep divisions across political and labor lines as well as fierce opposition from wealthy individuals within the state’s tech elite.
The initiative, which would impose a 5% tax on the net assets of California residents worth $1 billion or more as of the end of 2026, was advanced by the Service Employees International Union-United Healthcare Workers. The union began developing the proposal last year in response to expected federal healthcare funding cuts under the One Big Beautiful Bill Act, which is projected to reduce Medicaid spending by over $1 trillion nationwide over the next decade. Medicaid, a major funding source for California’s healthcare system, covers more than one-third of the state’s population.
The tax targets wealth held in assets such as publicly traded stocks, bonds, private business interests, intellectual property, and art—not income or real estate—potentially raising an estimated $100 billion from between 20 and 300 billionaires in California. Proponents argue the revenue is necessary to prevent hospital closures, maintain healthcare coverage for millions, and curb rising insurance costs.
The measure’s retroactive application to residents as of January 1, 2026, aims to prevent billionaires from avoiding the tax by moving out of state, a contested provision expected to face legal challenges if the initiative passes.
The proposed tax has drawn firm opposition from Governor Gavin Newsom and other prominent Democrats, including the party’s gubernatorial candidate Xavier Becerra. Newsom has criticized the measure as potentially harmful to California’s economic competitiveness, advocating instead for a national wealth tax. This stance has put him at odds with the California Democratic Party, which endorsed the initiative, and prominent progressives such as Representative Ro Khanna and Senator Bernie Sanders, who have publicly supported it.
The initiative has also divided labor organizations. While some unions, including the California Federation of Unions and United Teachers Los Angeles, have endorsed the tax to support healthcare funding, others, such as the California Teachers Association and statewide construction unions, oppose it. Critics within labor argue the tax’s funds are too narrowly allocated to healthcare rather than broader state needs and fear it could jeopardize other tax-backed education initiatives.
The measure has become a target of intense political and financial opposition fueled by some of California’s wealthiest residents, including tech billionaires like Sergey Brin, a Google co-founder, who has helped fund ballot measures aimed at overturning or blocking the wealth tax. These countermeasures have spent more than $300 million, overwhelmingly in opposition to the tax. Ads warn that the tax could lead to expanded asset taxation beyond billionaires, raising concerns about future impacts on ordinary taxpayers.
Some billionaires have publicly discussed relocating to states with lower taxes, including Nevada, Florida, and Texas, although others like Facebook founder Mark Zuckerberg remain in California through negotiated arrangements with their companies. Meanwhile, critics of the anti-tax campaign argue that retreating from California is an abandonment of political responsibility.
Tensions have surfaced between Newsom and union leaders, with reports of disagreement over the tax’s impact and strategy. The healthcare worker union’s president, Dave Regan, said Newsom urged him to withdraw the measure, which the governor’s office did not comment on. Internal disputes have also arisen within the Service Employees International Union, involving allegations of harassment and governance conflicts related to the wealth tax campaign.
Despite opposition, the union gathered the nearly 875,000 signatures required to place the measure on the upcoming November ballot, setting the stage for a contentious vote that could significantly reshape California’s approach to wealth taxation and healthcare funding.