A proposal to tax the wealth of billionaires in California has officially gathered enough signatures to appear on the November ballot, state officials announced on Wednesday.
It isn’t yet certain that the tax initiative will actually be voted on, however. Several prominent Californians, including Gov. Gavin Newsom, have vowed to defeat the measure, and they could strike a last-minute deal to remove it from voter consideration. Proponents have until June 25 to decide if they want to proceed with placing it on the ballot.
The California secretary of state, the top elections official, said Wednesday that her office verified that the labor union backing the proposal had collected more than enough signatures to clear the nearly 875,000 threshold to reach the ballot.
If the measure does move forward, there almost certainly will be an expensive election fight in California. It would pit the economic anxieties of working-class Californians against some of the state’s richest residents and business leaders, who say that such a tax would threaten California’s longstanding dominance in tech innovation. The measure would also face opposition from unlikely groups such as the California Teachers Association and the California Medical Association, which represents doctors.
The initiative would place a one-time, 5 percent tax on the assets of California residents with at least $1.1 billion and would dedicate most of the revenue to health care. (Those with between $1 billion and $1.1 billion would pay a lesser percentage.)
The union leading the campaign, Service Employees International Union-United Healthcare Workers West, argues that the tax is necessary to make up for cuts to Medicaid and other federal health insurance programs in the Republican domestic policy bill that President Trump signed last year.
An analysis by the California Legislative Analyst’s Office found that the proposed wealth tax would be likely to increase state tax revenue by tens of billions of dollars over several years. That analysis also found, however, that the measure would decrease income tax revenue by hundreds of millions of dollars or more annually because some billionaires would leave the state.
The proposal is designed to tax the wealth, and not just the income, of billionaires. Backers say that wealthy individuals currently have too many ways to limit their annual income and are able to shield most of their wealth from taxation. But tech leaders have said that the proposal could force them to liquidate investments in a way that could harm their companies.
Some Democrats have backed the general idea of taxing billionaire wealth but have said that this particular proposal is problematic, in part because it would dedicate the overwhelming share of revenue to health care instead of education or social services.
Mr. Newsom strongly opposes the measure. He has said that even the floating of the idea had already hurt California by driving some billionaires to relocate, taking their tax dollars with them. The governor, a Democrat, has said he thinks a tax on billionaires should occur at the federal level rather than solely in California.
“This will be defeated — there’s no question in my mind,” Mr. Newsom previously told The Times.
“I’ll do what I have to do to protect the state,” he added.
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