California voters will decide in November whether billionaires should pay a one-time 5% tax after a deadline passed on Thursday for its backers to withdraw the measure. The California Billionaire Tax Act qualified for the ballot after its supporters gathered over 1.6 million signatures, one of the highest totals in state history.
Union backs measure despite opposition
Debru Carthan, vice-president of the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), the union sponsoring the measure, said during a Thursday-evening press conference: "Enthusiasm for the billionaire tax is unlike anything we have seen before. The billionaire tax will be on the November ballot and we intend to win."
The proposal aims to fund healthcare, education, and food assistance programs. Proponents argue it addresses rising wealth disparities, while opponents, including Governor Gavin Newsom and billionaire-backed groups, claim it would drive business out of California and harm the economy.
Negotiations with Newsom fail
Negotiations this week between the unions and Newsom failed to reach a deal by the cutoff. SEIU-UHW offered a compromise reducing the tax to 2%, but Newsom's office quickly rejected it. Dave Regan, president of SEIU-UHW, said the governor was "in lockstep" with California's billionaires. "He would not entertain any proposal or any compromise to tax billionaires," Regan added.
Newsom, widely viewed as a potential Democratic presidential candidate in 2028, has long denounced the wealth tax as a threat to the economy and previously vowed to block it from the ballot.
Billionaires fund opposition
Silicon Valley elites have campaigned heavily against the proposal. Wealthy tech moguls including Palantir co-founder Peter Thiel, crypto billionaire Chris Larsen, and former Google CEO Eric Schmidt have funded opposition groups such as the California Business Roundtable. Google co-founder Sergey Brin has spent tens of millions since January to kill the effort, while Larry Page has moved to cut ties with the state.
Opponents have also pursued their own ballot measures. The Building a Better California Super Pac has put forward an initiative to prohibit new taxes on retirement holdings and personal savings, which also qualified for the ballot. Brin has donated $82m to the group.
Labor and medical groups split
While billionaires largely fund opposition committees, the measure has also drawn criticism from several prominent labor unions. The California Teachers Association and the State Building and Construction Trades Council of California are among unions opposing the tax, claiming it will not provide sustainable funding. Medical organizations such as the California Medical Association and Planned Parenthood Affiliates of California have also joined the opposition. A Planned Parenthood spokesperson said the group "agrees the wealthy must pay their fair share" but called the measure "shortsighted" and lacking a sustainable solution.
Support from Congressman Khanna
Democratic Congressman Ro Khanna, who represents Silicon Valley, unequivocally backed the initiative on Thursday. He praised SEIU-UHW for "showing incredible guts for standing for the healthcare of all Californians." Khanna added: "It makes no sense to me why any Democratic elected official or traditional Democratic allies wouldn’t be supporting this. It also matters for the country at a time when we have Elon Musk becoming a trillionaire, are we really debating whether we should have a 5% tax?"
California has about 200 billionaires, more than any other state, many in tech who have increased their fortunes amid the AI boom. Sergey Brin has increased his net worth by nearly $100bn in the past year, according to Forbes, and is now the world's third-richest man with about $258.9bn. Larry Page ranks second with about $280bn.
