A controversial proposal to tax California’s wealthiest residents is officially headed to the November 2026 ballot, setting up a high‑stakes political fight despite opposition from the state’s top leaders, including Governor Gavin Newsom and both major candidates vying to replace him.
State officials confirmed the measure qualified after proponents gathered over the roughly 875,000 valid signatures required.
The Service Employees International Union‑United Healthcare Workers West (SEIU-UHW), the health care workers’ union, filed the initiative in October 2025, claiming it would help to offset looming financial pressure as a result of healthcare cuts in President Donald Trump’s One Big Beautiful Bill Act, and submitted over 1.5 million signatures on April 27.
This now means voters will decide whether to impose a one‑time 5 percent tax on Californians, living in the state as of January 1 2026, whose net worth exceeds $1 billion, even after Newsom launched a behind‑the‑scenes campaign to stop it and urged supporters to abandon the effort.
The major ballot initiative is not only opposed by the sitting governor, but also by the leading candidates seeking to succeed him: Democrat Xavier Becerra and Republican Steve Hilton.
Newsweek has contacted Becerra and Hilton outside of regular working hours via email for comment.
Newsom Tried to Stop The Proposal
Newsom has been one of the most prominent critics of the billionaire tax, arguing it is a flawed policy that could jeopardize the state’s finances. He also warned that new wealth taxes would only push California’s highest earners (more than 80 billionaires on the 2025 Forbes 400 list live in the state) to relocate, reducing the income tax the state is able to collect for public programs.
Newsom’s press office previously told Newsweek that the governor “has been clear that he is not in support of a wealth tax, but supports California’s progressive tax system, which doesn’t punish those residents who make the least—unlike states like Texas and Florida [that] punish their lowest earners by taxing them far more than their highest.”
Newsom also posted on Substack on June 26, saying “I’m voting no” on the billionaire’s tax proposal, as he said the measure “dedicates almost all of the revenue it raises to a single category of state spending.”
He also said he believed there should instead be a national billionaire’s tax, as “the fight to make the wealthiest Americans pay more in taxes is not one we should be fighting state by state.”
“The fight belongs at the federal level, where this broken system was created in the first place,” he added.
The governor and his allies also mounted a pressure campaign to persuade the labor union behind the measure to withdraw it before the deadline. Negotiations even included a proposal to scale the tax down to 2 percent and pass it through the legislature instead, but Newsom declined, saying the initiative’s “fundamental flaws” remained.
Both 2026 Candidates Also Oppose Measure
The resistance extends beyond Newsom, as both leading gubernatorial candidates, Becerra and Hilton, are against the measure.
When the measure was first proposed in January this year, Hilton said on The Steve Hilton Show that the proposal captured perfectly the “stupidity and the failure of 16 years of one-party rule and above all the corruption of that.” He added that “there is so much wrong” with the proposal, and warned that it could “really hurt” the economy and “drive business out of state.”
Meanwhile, Becerra previously said he instead supports passing a ballot measure extending Propositions 30 and 55, according to Politico, which combined, extended temporary tax rate increases on high-income earners for school and health care funding.
“Yes to real revenue, but no to this initiative,” Becerra said of the wealth tax in a statement, seen by Politico. “Every Californian must pay their fair share, and no billionaire should pay taxes at rates lower than teachers, firefighters or nurses. But this is sketchy policy,” Becerra continued.
Despite their ideological differences, opponents across the political spectrum share similar concerns: that a wealth tax could drive wealthy residents out of California, destabilizing the state’s revenue base.
A coalition of business groups, healthcare organizations and even some traditionally Democratic‑aligned unions have echoed those warnings, arguing the policy could ultimately reduce funding for essential services rather than strengthen it.
Some Billionaires Already Begin To Shift Business Out Of State
The tax has also drawn fierce opposition from many of California’s wealthiest residents, some of whom have already spent millions of dollars to defeat it or fund rival initiatives, according to the Los Angeles Times.
Per the outlet, in late December, PayPal and Palantir co-founder Peter Thiel—who has a net worth of $27.9 billion, according to Forbes—donated $3 million to the California Business Roundtable, which opposes the billionaire tax. Former Google Chief Executive Eric Schmidt—who has a net worth of $40.6 billion, per Forbes—donated $1 million to the same group in March.
Theil and Google co-founders Larry Page and Sergey Brin—who each has a net worth over $250 billion, appearing in Forbes‘ ranking, respectively, as the second and third richest man in the world—have already moved some of their businesses out of state, according to The New York Times.
Who Supports The Measure?
SEIU-UHW chief of staff Suzanne Jimenez said in a statement shared with Politico, “The number of people who have privately resisted pressure to oppose the billionaire tax is far greater than the small number who have opposed it.”
“There is a big gap right now between the position some organizational leaders are taking versus the needs of their constituents, but that will not stop health care workers from achieving solutions that fight back against the Trump cuts to patient care in California,” she added.
The measure has also drawn support from progressive figures and labor advocates, including Senator Bernie Sanders and Representative Ro Khanna, who say it is necessary to offset federal cuts to healthcare funding.
Could It Be Overturned?
Because the billionaire tax proposal is a ballot initiative, reversing or substantially altering it would typically require another voter‑approved measure, rather than a simple legislative repeal.
Some competing ballot measures have already been put forward, meaning that if any of them receive more votes than the billionaire tax initiative, it could be overturned, although whether that will happen is not yet clear.