California billionaires could be subject to a one-time tax of 5% of their global net worth under a new ballot measure. Filed Wednesday by Jim Mangia, president and CEO of St. John’s Community Health, and backed by the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), the “California Billionaires Tax Act” aims to bring in $100 billion that would fill what it calls a revenue hole left by federal budget cuts.
Download the SAN app today to stay up-to-date with Unbiased. Straight Facts™.
Point phone camera here
The constitutional amendment, if successful, would see anyone living in California with a net worth over $1 billion taxed 5% on their overall wealth as opposed to income taxes that levy a percentage of tax on how much an individual or business made in the tax year. California’s current income tax rates have the highest top percentage in the nation.
There are nearly 200 billionaires in California who would be subject to this tax if it succeeds in the 2026 November Election, the union estimates. According to Bloomberg, four of the 10 richest people on Earth live in California.
“We’re calling on California’s billionaires to step up and pay a one-time, emergency 5% tax to prevent the collapse of California health care and help fund K-12 public education,” the union said in its announcement of the measure. “This would protect health care jobs and ensure working people and families can get the care they need.”
The union contends the tax is fair because the billionaires have earned their vast wealth by taking advantage of state resources.
Supporters will need to collect 875,000 validated signatures to qualify for the 2026 November ballot.
Health care deficit
Gov. Gavin Newsom projected the state would lose roughly $30 billion annually in the years following passage of Trump’s “Big Beautiful Bill” that placed limits on Medicaid reimbursements. The state faces the choice of either cutting health care via its Medi-Cal system or absorbing that extra cost.
Where would the money go?
The tax revenue would be split with 90% funding Medi-Cal and 10% going to a state education fund to aid public schools. The state would only be allowed to pull $25 billion from the account each year.
The measure also contains guardrails that would keep lawmakers from reducing an expenditure and then supplanting it with funding from the billionaire tax revenue.
What if Atlas shrugs?
The thought of a specialized tax aimed at a state or nation’s most wealthy individuals has often brought about warnings that they are also the most capable of moving to escape paying for it. If a taxpayer owns properties in several states, financial advisers can guide them through declaring residency at another of their addresses and doing what is necessary to make an inevitable legal argument that they’re no longer a resident of the tax-seeking jurisdiction.
The union is confident that the one-time tax won’t trigger an exodus of billionaires, saying in a fact sheet that the wealthy Californians “benefit from the advantages of our state to build their wealth. It’s unlikely that a one-time, emergency tax will motivate them to leave.”
While there’s no clear consensus on sudden increases in tax burdens for a locale’s ultra-wealthy, some evidence suggests there would be those who head for the exits.
A 2019 study from Stanford University looked at the migration of taxpayers earning enough to be subjected to a new 1-3 percentage point tax increase enacted in 2012. Using IRS tax return data, authors found that an additional .8% of those taxpayers declared another state as their residence beyond the average out-migration of 1.5%.
Past attempts
While the measure would create America’s first tax on overall net worth, the amendment isn’t the first proposal to do so in California. State Assemblymember Alex Lee proposed similar legislation multiple times in Sacramento. The bills have yet to see serious consideration.
