The Inevitability of Death & Taxes in California: But First, More Taxes.

 

May 9, 2026

As the state of California finds new ways to generate tax revenue after running budget deficits for the past few years, one new 2026 statewide ballot proposal is the so-called "Billionaires' Tax." It is now generally referred to as the "wealth" tax. It is billed as a method to extract 5% of tax revenue from billionaire residents' assets to support the state's executive and legislative agendas.  The ballot measure is being pushed by the United Healthcare Workers West (UHW), part of a powerful national union that represents many healthcare workers in California.  

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Californians have likely heard of the new "Billionaire's Tax" that was introduced into public consciousness a few months ago.  It was selectively labeled a tax on the state of California's billionaire class so they would pay their "fair share." So far, it has collected 1.5 million signatures and has qualified for a vote this November. One should note that the vast majority of federal taxes are indeed paid by the affluent.  According to the CATO Institute, at the federal level, the top 10 percent of income earners pay more than 60 percent of all taxes, and 72 percent of income taxes.

The measure was written by four university professors, Emmanuel Saez (UC Berkeley), Brian Galle (UC Berkeley), David Gamage (Missouri), and Darian Shanske (UC Davis), and promoted in California by UHW, a subsidiary union affiliated with the powerful Service Employees International Union (SEIU) umbrella.  Most of the authors are academics who focus on economics and income inequality, such as Emmanuel Saez, who researches incomes of the poor, middle class, and the wealthy, and David Gamage, who focuses on tax policy.

UHW union members are nurses, techs, and service staff who work in hospitals, physician practices, nursing homes, and assisted living facilities.  These union members belong to larger state healthcare organizations, including Kaiser Permanente and Dignity Health.  These measures are not always about the common good, but rather suggest a hidden agenda or to devise creative methods for generating more revenue for local and state governments. In fact, the temporary organization created to promote this wealth tax is called "Save California Healthcare and Education," with SEIU as the top funder of this initiative.  The name is intended to appeal to voters' desire for good intentions and benevolence in areas that benefit the common good, including healthcare and public education.  

The discussion ultimately comes back to the main question: why now? Professor Galle believes that, due to the recent tax cuts that Congress gave the wealthy, including in California, there is a $100 billion revenue loss projection, some of which will go toward healthcare, in particular MediCal.  He feels taxing billionaires in the state would generate funds to cover that shortfall, so that healthcare costs, which are currently increasing, are not passed down to patients. Emmanuel Saez is another economist at UC Berkeley who studies income inequality, and both join the other authors of this bill as an attempt to alleviate that inequality through additional taxation of those with means. Will it, though?

There is another hidden agenda within this ballot measure. Tech entrepreneur Chamath Palihapitiya, who opposes the measure, points to a clause in the ballot measure (page 26) that allows the state legislature to convert the original intent of a one-time tax on assets over $1 billion into a tax on the aggregate assets (home, financial investments) of almost everyone, including the middle class. This seems to be the endgame or another wealth transfer to the elites at the expense of the welfare of the public.  France had a similar wealth tax for decades and generated a few billion dollars a year. However, during that time, the economy saw nearly 50 times that amount of capital leave the country.  President Macron repealed it in 2018. 

Google co-founder Sergey Brin is part of the state's wealthy residents who are funding opposition to the wealth tax. Take the two competing ballot measures through an opposition organization, Building a Better California. The first measure would prohibit new taxes on personal property, including retirement accounts, intellectual property, and financial assets, and none of these assets could be taxed retroactively. The second would audit new taxpayer-funded programs and includes a special provision that would invalidate the proposed "billionaire tax." This seems appropriate.

The SEIU-UHW frames the issue, like Professor Galle, as a way to offset reductions in force (RIF) for hospitals and other organizations that employ many of their union members due to loss of state and federal funds. Their press release even refers to this measure as a way to stave off "collapse" of the state's healthcare system when costs are passed on to patients. It is very telling that the union also added that this ballot initiative would help K-12 education and food stamp assistance programs.  A Holy Trinity of empathic good intentions. While those issues are serious and important, using them to trigger support for billions in taxpayer money, of which the union itself will benefit indirectly (through dues from members), comes across as less than noble.  

Some of my concerns about the wealth tax passing are as follows:

• 1) If the clause on page 26 is enacted, I fear that many middle-class Californians will not be able to pay the increased taxes on assets (homes, stock portfolios), and many will be forced to sell off those assets and declare bankruptcy.  Why would legislators want this as a side effect?
• 2) The sheer volume of wealth flight leaving the state if the wealth tax passes may see a short-term gain in terms of tax revenue, but in the long-term, I think the financial health of the state will be horrific.  
• 3) California generates so much revenue for its annual budget, yet no one seems to want to track how money is spent, or adjustments that can be made for future budgets. For example, a lot of money was designated for the mitigation of chronic homelessness, but despite the money spent on it, the issue has not improved. The solution is always to seek more money, rather than to control and reduce what is being spent improperly.

If two competing ballot measures pass (the wealth tax and one of Sergey Brin's initiatives), then whichever one receives the most overall votes supersedes any other and becomes law. I hope the wealth tax does not pass, although polls show many in the state want to see the wealthy pay more. 

People tend to get energized by any sort of pushback or taxation of elites, and the "taxation" of the billionaire is really a Trojan Horse to tax the assets of a much larger group: the middle class within the state. Calling it the 'Billionaire Tax' is intended to hide its true purpose.  If the presumed effect was to tax billionaires at 5% of net assets, why the need for a special clause that allows legislators to lower the threshold without voter approval?  That appears to be the real goal. The middle class, as a group, lacks the organizational, financial, or legal resources to challenge the law, and capitulation and relinquishing assets will come about sooner or later without the protracted court fights.  

I believe that the catastrophic financial disaster will affect middle-class residents.  Politicians within the state don't seem to care too much for middle and lower-income Americans who will suffer.  Special interest groups, well-funded political action committees (PACs), and specially created political organizations have too much influence, and voters in the state continue to bear the brunt of those failed policies. People who require local, county, and state benefits will suffer from decreased funding. I sincerely hope voters in this state see through the false narratives and reject this dreadful ballot initiative.