California’s proposed billionaire tax: what you need to know

A sign in favor of the billionaire tax at the California Democratic party convention in San Francisco in February. Photograph: Jeff Chiu/AP View image in fullscreen A sign in favor of the billionaire tax at the California Democratic party convention in San Francisco in February. Photograph: Jeff Chiu/AP Explainer California’s proposed billionaire tax: what you need to know Plan to levy 5% tax on California billionaires championed by progressives – but state’s super rich are forcefully opposed Full story: California billionaire tax heads to ballot The proposed billionaire tax in California is officially heading to voters’ ballots in November. After getting more than double the necessary signatures to qualify, the secretary of state certified the ballot measure late on Thursday. The confirmation came after backroom dealing didn’t pan out between California’s governor, Gavin Newsom, who opposes the proposal, and the labor union backing it. While the wealth tax would only apply to individual billionaires living in California, the idea of passing a tax on the ultra-rich has become a national issue. Prominent political figures on the left, such as the Vermont senator Bernie Sanders, have championed the state measure, saying it could pave the way for a similar tax on the federal level. “Never before have so few people had so much wealth and so much power,” Sanders said during a February speech supporting the initiative in Los Angeles. “These billionaires are going to learn that we are still living in a democratic society where the people have some power.” But the measure’s backers are going to have to contend with powerful opponents to the initiative, including Newsom and Silicon Valley billionaires. The tech and crypto industry are throwing in tens of millions of dollars – in what’s expected to add up to unprecedented campaign spending – to oppose the initiative. So that means a messy fight is about to get a lot messier. What would the billionaire tax do? The California Billionaire Tax Act would levy a one-time 5% tax on any California resident worth more than $1bn. The proposal is backed by the Service Employees International Union-United Healthcare Workers West (SEIU-UHW) as a means of funding California’s strained food-assistance, education and healthcare programs, including safeguarding low-cost health coverage and preventing widespread hospital and emergency room closures. “Regular working people pay higher effective tax rates than the wealthiest Americans,” Suzanne Jimenez, the chief of staff for SEIU-UHW, earlier told the Guardian in an email. “Asking those who have benefited most from the economy to contribute more – particularly to stabilize health care systems under direct threat – is a reasonable step.” Jimenez said the initiative is a direct response to federal healthcare cuts under Donald Trump’s One Big Beautiful Bill Act. The tax would apply retroactively to all billionaires who were California residents as of 1 January 2026. The state i