California ballot measure proposes one-time 5% tax on billionaires to fund health, education and food assistance
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Voters will decide in November on a proposal to levy a one-time 5% tax on residents with net worth over $1 billion, projected to raise up to $100 billion for health-care, education and food-assistance programs.
A November ballot measure in California would impose a one-time 5% tax on residents whose net worth exceeds $1 billion as of Jan. 1, 2026. Proponents say the initiative could generate roughly $100 billion, with about 90% of the revenue earmarked for health-care programs and the remaining 10% for education and food-assistance.
Supporters, who refer to the proposal as the “Billionaire Tax,” argue the funds are needed to offset recent cuts in federal Medicaid funding and to keep hospitals and emergency rooms operating. The measure includes provisions allowing taxpayers to pay the liability in five annual installments and offers a deferral option for those holding largely illiquid assets. Anti-avoidance rules are also built in to prevent asset shifts or ownership restructuring aimed at reducing the tax burden.
Governor Gavin Newsom and other state officials oppose the measure, contending it is a short-term fix that could encourage wealthy residents to leave the state and weaken California’s tax base. Democratic gubernatorial candidate Xavier Becerra and Republican candidate Steve Hilton have expressed similar concerns, as have coalitions representing health-care, education and housing interests.
The nonpartisan Legislative Analyst’s Office estimates the initiative could produce tens of billions of dollars in its early years, but projects a later decline in personal income-tax collections as high-income taxpayers adjust their behavior. California’s top 1% of earners currently contribute nearly half of the state’s personal income-tax revenue.
The Service Employees International Union-United Healthcare Workers West, which backs the proposal, previously offered to lower the rate to 2% in an effort to gain the governor’s support, but the governor’s office maintained its opposition.
