California Groups Push for Tax on Billionaires Amid Budget Cuts

Labor and health care organizations in California are mobilizing support for a proposed ballot measure that would impose a one-time 5% tax on the wealth of around 200 billionaires in the state. This initiative, spearheaded by the Service Employees International Union (SEIU) and St. John’s Community Health, aims to raise approximately $100 billion in revenue to support health care and education amid looming federal cuts to social services.

Currently, California is grappling with potential reductions in federal funding, which could significantly impact its social safety net. Governor Gavin Newsom has historically opposed increasing taxes on the wealthy, but advocates believe that the proposed measure could provide a vital solution. Dave Regan, president of SEIU-UHW, stated, “We are facing literally a collapse of our health care system here in California and elsewhere. This will help us keep health care facilities open and stabilize premiums and coverage for all Californians.”

The initiative would tax the net worth of billionaires as of 2025, allowing them to pay the obligation over a five-year period. Funds generated from this tax would be allocated with 90% earmarked for health care and 10% for K-12 education. To qualify for placement on the 2026 ballot, proponents must collect 874,641 signatures, a target they believe is attainable.

Rather than taxing income, the proposed measure would focus on individuals’ total net worth, encompassing everything from investments to property and other assets. This approach has raised concerns among some critics, including Susan Shelley, vice president of communications at the Howard Jarvis Taxpayers Association. Shelley warned that while many Californians might think the tax won’t affect them, it could set a troubling precedent. “We tax income at a very high level, but we don’t tax wealth and assets,” she noted.

Democratic lawmakers had considered alternative methods of raising revenue to support state social services, which depend on billions in federal funding. However, they shifted focus as the state faces a projected 3.4 million individuals losing Medicaid coverage due to federal eligibility changes. Cuts to these programs may not take full effect until 2027, but California is already implementing measures to reduce its health insurance offerings for low-income and disabled residents.

Despite these challenges, Dave Regan affirmed that there are no plans to negotiate with state lawmakers to withdraw the ballot initiative. Proponents of the measure argue that it is designed specifically to avoid negative economic consequences. Emmanuel Saez, an economics professor at the University of California, Berkeley, emphasized that the tax structure would prevent billionaires from evading their obligations by relocating their assets outside the state. “California billionaires are not going to be able to avoid the tax by moving their assets outside of California,” Saez asserted.

Supporters, including the California Health Care Foundation, advocate for the measure as a means to ensure continued access to essential health services for all Californians. They argue that the tax will not affect the middle class or businesses, as it specifically targets individuals with substantial wealth.

As the campaign to collect signatures gains momentum, the outcome of this initiative could significantly impact California’s budgetary landscape and the future of its social services. The push for a wealth tax represents a growing call for reform in how the state addresses wealth inequality and funding for essential services.