A proposal to impose a one-time tax on California billionaires has gathered enough signatures to qualify for the November ballot, setting up a major political fight between labor groups, tech billionaires and Gov. Gavin Newsom.
The measure, known as the California Billionaire Tax Act, would place a one-time 5% tax on residents with a net worth above $1 billion. Supporters say the money would help fund healthcare, food assistance and education programs at a time when state services are under pressure.
The proposal is backed by the Service Employees International Union-United Healthcare Workers West, which says wealthy Californians should contribute more to protect public programs. The union said it submitted more than 1.55 million signatures, far more than required to move the measure toward the ballot.
State officials announced Wednesday that the proposal had qualified, but the campaign still has until June 25 to decide whether to move forward or withdraw the measure as negotiations continue.
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The tax has become one of California’s most high-profile political battles. Supporters frame it as a way to make the ultra-wealthy pay more in a state with major affordability and public service challenges. Opponents warn that it could drive billionaires out of California and ultimately reduce state revenue.
Some of the state’s most powerful tech figures have donated millions to fight the measure. Google co-founder Sergey Brin has reportedly spent at least $82 million opposing the tax and has moved just across the state border to Nevada. Other tech leaders, including Peter Thiel, Eric Schmidt, Chris Larsen and Tony Xu, have also contributed to efforts against it.
California is home to more billionaires than any other state, with more than 200 residents in that category. Many have seen their wealth rise sharply in recent years, especially during the artificial intelligence boom.
Not every tech leader opposes the proposal. Nvidia CEO Jensen Huang has publicly defended living in California despite high taxes, telling others not to leave the state.
Newsom has also opposed the measure. His office has previously argued that state-level wealth taxes can push wealthy residents elsewhere, creating a “race to the bottom.” The governor is reportedly trying to help negotiate a deal that could keep the proposal off the ballot.
Political analysts say the measure may have been designed partly as leverage. Instead of spending hundreds of millions on a bruising ballot campaign, the union could use the threat of a statewide vote to push for a compromise on healthcare funding or related priorities.
Several local unions and lawmakers, including Rep. Ro Khanna, have supported the tax. But other influential groups, including the California Teachers Association, the California Medical Association and Planned Parenthood Affiliates of California, have opposed it.
The next week will be critical. If the measure is certified and not withdrawn, California voters could decide in November whether to approve one of the most aggressive wealth-tax proposals in the country.
Why It Matters
The proposal matters because it could reshape California’s debate over wealth, taxes and public services. Supporters say billionaires can afford a one-time contribution to help fund essential programs. Opponents say the tax could push wealthy residents and investment out of the state.
The fight also matters nationally because California often sets the tone for economic and political debates in other states.
What Comes Next
The campaign has until June 25 to decide whether to keep the measure on the November ballot or withdraw it as part of a possible deal.
If it moves forward, California could see one of the most expensive ballot fights of the year, with labor unions and progressive groups on one side and tech billionaires and business interests on the other.
