California Plans to Introduce a Special Tax on Billionaires' Wealth – ABC News
In the state of California (U.S.), a high-profile initiative to impose a one-time 5% tax on ultra-wealthy individuals with net worths exceeding $1 billion may be put to a vote in November.
The main architect and lobbyist behind this proposal is the influential healthcare workers’ union SEIU-UHW, which has already officially collected and submitted the required number of voter signatures to automatically include the measure on the final ballots.
According to preliminary estimates by the bill’s authors, the fiscal measure would affect approximately 250 California billionaires and generate an estimated $100 billion for the state budget over the next five years. At the same time, it is proposed that 90% of all accumulated revenues be earmarked directly for healthcare. The need for additional funding arose amid massive cuts to healthcare funding, a consequence of the Trump administration’s new federal law, known informally as the “Big Beautiful Bill.” Union Chief of Staff Susanna Jimenez openly warned of the threat of a “complete collapse” of the state’s medical infrastructure and a catastrophic staff shortage if the current financial shortfall is not quickly addressed.
Despite the initiative’s social appeal, it has faced fierce resistance from the political and business establishment. Current California Governor Gavin Newsom has publicly opposed the tax, as have the vast majority of candidates vying for the state’s top office. The only exception during the recent May debates was the well-known billionaire and politician Tom Steyer, who, on the contrary, called the proposal insufficiently radical, though he noted that California must remain an attractive haven for the growth of global technology companies. Opponents of the idea from business associations, notably Brian Broko, leader of the Stop the Squeeze coalition, emphasize that such a move would deal a direct blow to the state’s entire economic engine.
In addition, the independent, nonpartisan California Legislative Analyst’s Office warned in its report that the actual financial impact is difficult to predict: in the event of a mass migration of capital and the relocation of billionaires to other states (such as Texas or Florida), the budget could lose hundreds of millions of dollars in current tax revenue each year. Union representatives dismiss these concerns, calling them the traditional “scare tactics” used by big business whenever investments in the public good are discussed. Experts note that the outcome of the California referendum will have serious implications for U.S. national policy as well, since Congressman Ro Khanna and Senator Bernie Sanders are already using this precedent to push for a federal law imposing an annual 5% wealth tax.
This was reported by the American broadcaster ABC News.
Earlier, Elon Musk criticized California authorities for their extremely high taxes. Because of them, Tesla moved its headquarters to Texas, though Musk officially attributed the move to the dominance of the LGBT community in the state.
