(CALIFORNIA) — Backers of the 2026 Billionaire Tax Act filed and amended a proposed California ballot initiative that would impose a one-time wealth-based levy on a small group of ultra-high-net-worth residents, setting off a fast-moving political fight over revenue, investment and whether the state can tax billionaire fortunes in the way the measure envisions.
The proposal, listed as Initiative No. 25-0024, targets California residents and certain trusts whose net worth exceeds a billionaire-level threshold as of a year-end 2026 valuation date. Supporters say the money would go largely to health care, with smaller portions for education and food assistance, and they have framed it as a response to what they call federal funding cuts under the Trump administration.
Service Employees International Union-United Healthcare Workers West, known as SEIU-UHW, has led the push, arguing the measure would require the state’s wealthiest residents to contribute more to public programs and to the state resources that supporters say helped enable fortunes to grow. Sen. Bernie Sanders rallied support in Los Angeles last week as part of the campaign.
The initiative was filed on October 22, 2025, and amended on November 26, 2025. Supporters have described it as a way to raise a very large sum for public services by taxing a narrow slice of the richest taxpayers, estimating it would apply to around 200 billionaires.
Emmanuel Saez, an economist, put a separate estimate on what the levy could generate after implementation, projecting $20 billion annually over 2027-2031 from the 200 wealthiest taxpayers. Supporters have used figures like that to argue the measure could produce sustained funding for state priorities, even though the tax itself is described as a one-time levy tied to a specific valuation date.
Opponents have organized quickly and raised significant sums to try to stop the measure before voters see it. Billionaires have donated over $40 million to defeat it, including $5 million from cryptocurrency mogul Chris Larsen, totaling $12 million this year, and $35 million from a committee backed by Google co-founder Sergey Brin.
Other donations cited by opponents include $100,000 from investor Ron Conway. Opponents have also cited the combined $350 billion net worth of donors and others opposing the measure, and estimates their fortunes would face about $17 billion in tax liability under the proposal.
Gov. Gavin Newsom, a Democrat, and the California Chamber of Commerce have opposed it early, saying it poses risks to California’s economy. The opposition campaign has argued the measure could discourage entrepreneurship and investment, and it has cast the proposal as an unusually large exposure for a narrow group of people who can change their residency.
Rep. Ro Khanna, a Democrat, has urged compromise on how the measure treats startup founders who hold illiquid voting shares in AI firms. Rep. Kevin Kiley, a Republican, introduced a federal bill against it, adding a Washington dimension to a dispute playing out in California’s ballot system.
To get on the 2026 general election ballot, the initiative requires supporters to run a large signature drive that must meet California’s qualification rules. The measure’s timing matters for both sides because it ties tax exposure to a snapshot of residency and a year-end valuation date, with critics and supporters both focusing on the incentives created by those cutoffs.
The proposal offers taxpayers a choice between paying in a single payment tied to the 2026 tax year or spreading what they owe over equal installments. Choosing installments comes with an annual deferral charge that increases the overall cost, a feature that supporters present as an administrative option and that critics cite as another reason wealthy taxpayers may restructure holdings or change residency.
Liquidity is central to the debate because the measure aims at a taxpayer group whose net worth can be heavily concentrated in closely held businesses, venture-backed companies, and other assets that may not be easy to sell quickly. That has driven a separate argument about founders and early investors whose wealth may exist more on paper than in cash.
The initiative also includes a phase-in design around the billionaire threshold so that taxpayers just above it do not face the full rate immediately. Supporters have promoted the phase-in as a way to smooth entry into the tax, while opponents have argued it does not resolve hard valuation questions for people with assets that can swing sharply in price.
Valuation would rely on approaches that include book value and earnings-based multipliers. Critics have said that kind of methodology invites disputes, particularly for private companies and startups, while supporters have pointed to the same structure as a way to apply a standardized approach when market prices are not available.
The measure distinguishes between directly held real estate and real estate owned through businesses. It excludes directly held real estate from the wealth calculation but taxes business-owned real estate, a design choice that could shape how affected taxpayers hold property and how disputes arise over entity structures.
Claims and counterclaims about “wealth flight” have taken center stage as opponents argue that the tax would accelerate moves out of California. Critics have pointed to high-profile relocation examples, saying Larry Page, Sergey Brin, Peter Thiel, David Sacks and others worth a combined $1 trillion have relocated, including moves to states such as Texas and Florida, before the January 1, 2026 residency snapshot.
Chamath Palihapitiya estimated $700 billion-$1 trillion in wealth flight already, a range cited by critics to argue that California risks shrinking its top-end tax base. Supporters, led by SEIU-UHW, have argued the tax is aimed at the wealthiest residents and at funding services they say are threatened, disputing the framing that the state must forgo a large new revenue stream because some individuals may leave.
Residency and domicile questions have become a practical focus because the initiative uses a residency snapshot, and because ultra-high-net-worth taxpayers can have homes and business interests spread across states. Opponents have said that creates a straightforward incentive to shift residency before the snapshot date, while supporters have argued California should not allow the threat of relocation to dictate how it funds public programs.
Legal challenges are also looming, with observers on multiple sides predicting litigation if voters approve the measure. The National Taxpayers Union predicted court invalidation on constitutional grounds like bills of attainder, reflecting an argument that the measure’s design could run afoul of constitutional protections.
Legal experts at Baker Botts foresee challenges under federal and state constitutions, including due process and equal protection. The measure attempts to address constraints in California law by including a constitutional amendment aimed at overriding California’s 0.4% intangible property tax cap, but critics and some legal observers have argued that rewriting constitutional language does not eliminate litigation over how the tax operates in practice.
Valuation and enforcement could become focal points in court fights because the measure relies on methodologies that may be contested by taxpayers with large, illiquid holdings. Opponents have highlighted the risk of prolonged disputes over how to treat business equity and complex ownership structures, while supporters have presented the measure as a targeted approach to raising money for health care, education and food assistance from a small group of residents with the greatest ability to pay.
The political clash has also spilled into competing visions beyond Sacramento, with Kiley’s federal bill adding pressure from congressional Republicans as the state campaign ramps up. With SEIU-UHW and Sanders campaigning for the 2026 Billionaire Tax Act and Newsom and business groups opposing it, the initiative has become a test of whether California voters will back a one-time wealth levy that supporters pitch as a fairness measure and opponents warn could push capital, founders and fortunes out of the state.
SEIU-UHW Backs 2026 Billionaire Tax Act as Bernie Sanders Pushes Forward
The 2026 Billionaire Tax Act is a proposed California ballot measure seeking a one-time levy on approximately 200 billionaires to fund public services. While supporters emphasize tax fairness and social funding, opponents—including Governor Newsom—argue it threatens the state’s economy by encouraging wealthy residents to relocate. The initiative faces a massive signature drive and certain legal battles over its constitutional validity and complex valuation methods.
