California will vote on billionaire tax

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California voters will decide in November whether to temporarily raise taxes for billionaires after the labor union backing the proposal announced Thursday that it will move forward with the controversial ballot initiative.

The proposal, known as the California Billionaire Tax Act, would impose a one-time 5 percent tax on individuals with a net worth of more than $1 billion and who were residents of the Golden State as of Jan. 1. It’s backed by the Service Employees International Union (SEIU) Healthcare Workers West.

Supporters of the so-called wealth tax say it could generate $100 billion in revenue, most of which would be used over multiple years to help fund the state’s Medicaid program and other services following federal spending cuts.

“Enthusiasm for the billionaire tax is unlike anything we have seen before,” Debru Carthan, the union’s vice president, said during a Thursday press conference. “The billionaire tax will be on the November ballot and we intend to win.”

The deadline for backers to withdraw the measure from the ballot passed on Thursday. California Gov. Gavin Newsom (D) and other traditionally pro-union politicians opposed it, and talks between the union and governor’s office failed to produce a compromise before the deadline.

Union President Dave Regan said he was “all in” on the measure, calling its opponents “totally out of touch.”

Last week, the SEIU chapter offered to scale back its proposal for a lower 2 percent tax on billionaires in exchange for Newsom’s support. But his office quickly rejected the offer, according to Regan, signaling the governor is in “lockstep” with the state’s wealthiest residents.

“He would not entertain any proposal or any compromise to tax billionaires,” Regan said.

The proposal could be especially challenging for Newsom’s 2028 prospects, especially as he weighs a potential presidential bid. The California governor is viewed as an early front-runner for the Democratic Party.

A coalition of healthcare, education and business groups spoke out against the measure, arguing it would push wealthy Californians out of the state and squeeze future income tax revenue streams.

“The dangerous wealth tax directly threatens vital funding for education and schools, healthcare and clinics, public safety, and infrastructure projects by making California’s revenue even more volatile,” the coalition said in a statement.

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2028 presidential election

billionaire tax

California

California Billionaire Tax Act

Gavin Newsom

Medicaid

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SEIU Healthcare Workers West

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