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California's Proposed 5% Billionaire Tax to Fund Healthcare Rattles Tech Leaders
A proposed California ballot initiative seeks to impose a one-time 5% wealth tax on billionaires to raise funds for public healthcare.
Key Points
- A proposed California ballot initiative seeks to impose a one-time 5% wealth tax on billionaires to raise funds for public healthcare.
- The measure targets residents with assets over $1 billion and is estimated to generate tens of billions of dollars for the state.
- Prominent tech investors and Governor Gavin Newsom oppose the tax, arguing it will drive wealth and innovation out of California.
- Proponents must collect nearly 900,000 signatures by June 2026 for the initiative to qualify for the November 2026 ballot.
A California union is pushing a ballot initiative for a one-time 5% wealth tax on billionaires to raise billions for public healthcare. The proposal has sparked a major battle, pitting social funding needs against fears of a tech-led capital exodus from the state.
Show me the money: The measure targets the net worth of any resident whose assets exceed $1 billion, excluding real estate and retirement accounts. Proponents claim it could generate $100 billion to offset federal healthcare cuts, but the state's nonpartisan Legislative Analyst’s Office offers a more conservative estimate of "tens of billions" while warning of a potential long-term loss in income tax revenue.
The empire strikes back: High-profile tech investors like Peter Thiel and Chamath Palihapitiya, along with Governor Gavin Newsom, have come out against the tax. Their central argument is that it will hamper innovation and drive wealth out of California, with some reports suggesting billionaires are already planning their exits.
Before it can become a high-stakes battle at the polls in November 2026, the initiative faces its first major test. Proponents must gather nearly 900,000 signatures by June 2026 to even qualify for the ballot. California is forcing a confrontation over wealth inequality, betting it can tax its richest residents without driving them—and their massive tax base—away for good.
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