The Service Employees International Union-United Healthcare Workers West (SEIU-UHW) is back with yet another ballot measure that is ridiculous on its face — and will result in a lot of wasteful political spending.
In 2018, 2020 and 2022, the union put forward statewide ballot measures threatening a laundry list of mandates and regulations on California’s dialysis clinics that, if implemented, would ultimately harm dialysis patients.
The measures were resoundingly rejected by voters each time and were clearly little more than an effort to financially punish the biggest operators of dialysis clinics for not bowing to union demands.
This time, the union has made headlines for yet another absurd proposal: the 2026 Billionaire Tax Act.
The proposal calls for all billionaires living in California on Jan. 1, 2026, to pay a one-time tax equal to 5% of their net worth to the state.
As explained by the Legislative Analyst’s Office, the money would be stashed in a special account, exempt from other state laws on how public funds must be spent.
“The state would decide how and when to spend the money but it would have to be spent on certain types of services,” the LAO explains. “In particular, 90 percent of the money would have to be spent on health care services for the public. The rest would have to be spent on administration of the wealth tax, education, and food assistance.”
Setting aside the self-interest of a health care union proposing a tax to provide a windfall for its sector, the proposed wealth tax is both nonsensical and counterproductive.
Punishing innovators and job creators for living in California is a good way to push innovators and job creators out of California.
As Chris Edwards of the Cato Institute notes, “The fortunes of the richest Americans consist mainly of active business assets that generate jobs and income. Increasing taxes on wealth would undermine investment and thus productivity and wage growth.”
“You are fighting to force founders like me to sell huge chunks of our companies to pay for fraud, waste, and political favors for the organizations pushing this ballot initiative,” wrote tech entrepreneur Palmer Luckey on X over the weekend. “I made my money from my first company, paid hundreds of millions of dollars in taxes on it, used the remainder to start a second company that employs six thousand people, and now me and my cofounders have to somehow come up with billions of dollars in cash.”
While proponents argue 5% is a drop in the bucket for those who would be impacted by such a tax, such an argument pretends that people don’t respond to incentives and disincentives.
If one is truly concerned about a lack of resources to pay for health care, education or other services in California, one ought to look at all the ways state and local governments waste the public funds they already have.
From the high-speed rail project to public sector union giveaways, California has plenty of money. It just has bad decision-makers in positions of power.
But if one still thinks California government needs more money, the just and sustainable way to do so is through economic growth, not extorting taxpayers further.
Of course, no serious person thinks the SEIU-UHW has the best interests of Californians in mind. Even Gov. Gavin Newsom has voiced his own “adamant” opposition to the measure.
We will be very fortunate if the proposal fails to make it to the ballot, but if it does, it should be rejected.