A fight brews over CA’s proposed billionaire tax

To tax or not to tax? That is the question that California voters will soon answer. A healthcare union’s controversial measure to impose a one-time tax on billionaires was officially added to the state’s November ballot this week, to the dismay of Gov. Gavin Newsom and several groups that you may not expect to oppose a wealth tax.

The initiative, known as the California Billionaire Tax Act, would slap a one-time 5% tax on people worth $1.1+ billion who have been California residents since at least Jan. 1.

• Supporters say this would rake in $100 billion over five years from the state’s 200+ billionaires.
• There are plans for the new revenue: Ninety percent would go toward healthcare to offset federal spending cuts, and the remainder would go to education and food assistance programs.

Backers include Silicon Valley Rep. Ro Khanna, billionaire activist Tom Steyer, and Sen. Bernie Sanders.

There’s plenty of opposition

Newsom has argued that a statewide billionaire tax would harm innovation and cause wealthy people to flee California. After he tried and failed to block the measure from the ballot, the governor/podcaster/2028 presidential hopeful instead proposed a national billionaire tax (unlikely to pass under the Trump administration) in a Substack post yesterday.

Plenty of billionaires are against the measure, too.

Also:

• Several unions and Democrat-aligned organizations have voiced concerns that the proposed levy could threaten income tax revenue and make other tax hikes on high earners harder to pass.
• Planned Parenthood’s California chapter said the measure is “shortsighted” and “does not offer a sustainable solution to funding cuts,” The Guardian reported.

If you live in California…expect a costly struggle for your attention. Billionaires have already given $100+ million to support rival ballot measures through a political committee called Building a Better California. Most of that funding came from Google co-founder (and the world’s third-richest person) Sergey Brin, who recently moved from California to Nevada.

Pulse check: The proposed tax has 54% support among likely voters, according to a May poll from Public Policy Institute for California.—ML