CA Democrats endorse billionaire tax, despite governor’s opposition
Image: Patrick T. Fallon
California’s Democratic party has endorsed the state’s proposed 5% wealth tax on all billionaires in the state, after a weekend meeting on Sunday cleared the 60% threshold needed to overcome objections and win the endorsement.
Quick background: The ballot initiative would impose a one-time 5% tax on individuals with a net worth of $1+ billion who lived in California as of January 1, 2026, depending on whether the voters approve or reject it in the November election.
- It would apply to ~200 billionaires across the state, imposing a 5% tax on most of their high-value assets like stocks, privately held businesses, art, collectibles, and intellectual property.
- The measure wouldn’t apply to pensions, retirement accounts, or real estate owned directly.
California’s proposal is projected to generate ~$100 billion in revenue over five years for the state, with the funds intended to offset recent federal cuts to state health programs.
The arguments
Supporters of the proposed billionaire tax, including progressive politicians Sen. Bernie Sanders (I-VT) and US Rep. Ro Khanna (D-CA), healthcare workers unions, and other labor orgs, frame the measure as a way for the state’s wealthiest residents to support public services without significantly altering their lifestyles.
They also argue that billionaires are among the largest beneficiaries of recent federal changes that cut funding from state health programs, with the money mostly used to offset federal tax breaks for the very wealthy, and that this new tax ensures they pay their fair share.
On the flip side: Critics of the proposal include business groups, tech leaders, Republicans, Gov. Gavin Newsom (D) and gubernatorial candidate Xavier Becerra (D-CA). They argue that imposing a wealth tax at the state level will simply prompt billionaires to relocate, shrinking a tax base that already accounts for a large share of California’s revenue.
- Others raise concerns about how the tax would be implemented, noting the challenges of determining residency and accurately valuing complex assets.
- They also caution that a one-time tax on billionaires is merely a short-term solution that doesn't solve California’s fundamental financial issues, but rather kicks the can down the road.
What do voters think?...More than half of Californians (54%) support the proposed billionaire tax, while 45% oppose and 1% are undecided, per the most recent polling from Public Policy of California.
Looking ahead: The billionaire tax isn't the only tax measure on California's ballot. Voters will also consider Propositions 41 and 42, which would make it harder to approve future special taxes and would ban new taxes on the ownership of assets like stocks and business interests, respectively. If either measure passes, the billionaire tax would not take effect, even if voters also approve it.
📊 Flash poll: Do you support or oppose California’s new proposal to impose a one-time 5% wealth tax on billionaires?
See a 360° view of what pundits are saying →
Sprinkles from the Left
- Some commentators argue that California's proposed billionaire wealth tax would provide a temporary funding boost but also discourage entrepreneurs and businesses from staying in the state, ultimately weakening long-term economic growth and tax revenue.
- Others contend that taxing billionaires would help fund healthcare while making the ultrarich pay a fairer share, potentially shifting Americans' views on taxing extreme wealth and encouraging similar measures elsewhere.
- “Billionaire tax risks California’s long-term growth for a temporary fix” –Ahmad Thomas, Times of San Diego
- “California’s billionaire tax proposal is the fight the ultrarich feared” –Mariel Garza, Boston Globe
- “Wealth Taxes Target the Rich But Often Miss the Mark” –Bloomberg Editorial Board
Sprinkles from the Right
- Some commentators argue that taxing billionaires risks driving entrepreneurs and investment out of California, ultimately reducing long-term tax revenue, slowing job creation, and making the state less attractive for businesses to grow.
- Others contend that wealth taxes have repeatedly fallen short in countries like France, arguing California would repeat the same policy mistakes that led other countries to abandon these taxes after they caused wealthy people to move, taking their money elsewhere and raising far less tax revenue than promised.
- “California Democrats go full socialist in endorsing billionaire tax” –Jon Hartley, NY Post
- “It Failed in France. It Would Be a Disaster in California.” –Joshua Rauh and Benjamin Jaros, NYT
- “I’m from Nebraska. Here’s what wealth-tax advocates don’t realize.” –Ben Nelson, WaPo
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