Leaders of a proposal to tax California’s billionaires faced growing opposition Thursday as they declared the issue would make the state’s ballot in November.
Top Democrats and advocacy groups were lining up against them. Silicon Valley titans were preparing to spend heavily to defeat them. Gov. Gavin Newsom said the measure would hurt the state.
But officials with the health care union behind the “Billionaire Tax Now” campaign said on Thursday night on a Zoom call that they were confident.
“Popular support is on our side,” said Debru Carthan, the vice president of the union, SEIU-United Healthcare Workers West.
The push to put a billionaire tax to a popular vote in blue California has exposed deep divides on the left, even as Democratic politicians across the country rally around calls for the wealthy to pay more. The issue is pitting the populist mood of the public against many Democrats’ fears that the measure will push the ultrawealthy to join a broader exodus from the state and take their tax dollars with them.
The ballot measure would impose a one-time wealth tax of 5 percent on the state’s roughly 250 billionaires and put the revenue toward health care — to counteract federal cuts imposed by the Trump administration, advocates say. California’s billionaires account for more than $2 trillion in wealth, advocates say, meaning the tax could funnel $100 billion to the state, though others dispute that number.
Backers of the measure include Sen. Bernie Sanders (I-Vermont) and other progressives who want to push Democrats in a more populist direction.
“This is a moral test about whether the Democratic Party will be for the billionaire class and the donor class or whether we will be for the working class,” said Rep. Ro Khanna (D), who represents a deep-blue district in Silicon Valley and has sparred with some of his highest-profile constituents over the wealth tax.
But other Democratic politicians in the state are warning against the ballot measure, arguing a California tax would will hurt business and decrease the state’s revenue in the long run. Chief among the critics is Newsom, a likely 2028 presidential contender whose team has helped marshal the opposition. Xavier Becerra, the Democrats’ nominee to succeed Newsom, is against the tax as well.
Newsom has said that “nationally we need to tax billionaires more” but that California exists “in a competitive reality with 49 other states.”
An expensive showdown is already underway. A group backed by Silicon Valley investor Chris Larsen is raising the alarm with TV ads that “billionaires and businesses are already leaving” and making Newsom the face of the anti-tax push. Another group largely funded by Google co-founder Sergey Brin — who recently left California for Nevada — is promoting a separate ballot measure that would invalidate the billionaire tax if it passes in November with more votes.
“There’s going to be more money than God has deployed against [the tax], for all the obvious reasons,” said Garry South, a California-based Democratic strategist, echoing others who speculated the spending could reach the hundreds of millions of dollars.
Some opponents of the tax had hoped a last-minute deal might preempt the battle and lead SEIU UHW, the union behind the tax, to pull it from the ballot. But no such deal materialized by a Thursday evening deadline. Newsom’s office rejected an offer from SEIU to reduce the tax to 2 percent in exchange for his support.
A May poll found that 54 percent of likely voters in California, including 76 percent of Democrats, supported a one-time tax of up to 5 percent on billionaires, while 45 percent of likely voters opposed it.
But supporters of the ballot measure expect to be massively outspent, and funding has historically been a major factor in the outcomes of California ballot measures, said Kevin Liao, another Democratic strategist in the state. “I think it is an uphill climb for the yes side, given they won’t have that level of financial resources,” Liao said.
Asked Thursday how much they had budgeted to spend on the ballot measure, leaders of the effort did not give a number and said they are fundraising.
Emmanuel Saez, a California Berkeley economics professor who helped craft the tax, said Americans are so sour on billionaires that the yes campaign can overcome a cash gap.
“It’s possible that an insurgent campaign could still prevail,” said Saez, who once advised the presidential campaigns of Sanders and Sen. Elizabeth Warren (D-Massachusetts), another Democrat who has championed taxes on the richest Americans.
Saez and another economist laid out their case for the billionaire tax in an op-ed this spring, predicting that it could raise almost $100 billion for the state and saying that even if all of California’s billionaires left, it would take 25 years for the lost tax revenue to outweigh this one-time windfall.
The tax would apply to billionaires who lived in California as of Jan. 1, 2026, meaning it’s too late for them to avoid the tax if they move away this year. (The New York Times first reported that Brin — estimated net worth of $260 billion, per Forbes — left late last year.) Some billionaires have shrugged off the prospect — Nvidia CEO Jensen Huang (estimated net worth of $169 billion) has said he is “perfectly fine” with it — but others including venture capitalist Peter Thiel ($26 billion), ex-Uber chief executive Travis Kalanick ($3.6 billion) and car loan mogul Don Hankey ($8.2 billion) have left.
Critics say it’s not clear how much the billionaire tax would ultimately raise. Researchers at Stanford’s Hoover Institution estimated about $40 billion. A nonpartisan analysis for the California legislature notes it is “very hard to predict” and anticipates a loss of hundreds of millions or more in income tax revenue each year.
A slew of unions, including some health care groups such as the California Medical Association, have come out against the tax. And some have questioned SEIU UHW’s decision to allocate the overwhelming majority of the revenue toward health care rather than other sectors.
Brian Marvel, the president of the Peace Officers Research Association of California, said Newsom’s office reached out a few weeks ago encouraging his group to weigh in.
“Do we want to push all these people out for this one-time money that’s going to fund just the health care people, and long term we’re going to have issues funding public safety, funding schools?” Marvel said.
“If the governor is able to get most of the unions to coalesce around him and his position, I think it’s going to be a difficult fight for them to win,” he added.
Leaders of the tax effort on Thursday accused Newsom and his allies of acting “in lockstep” with billionaires and said they understood how formidable the opposition was.
“We know what we’re getting into,” SEIU UHW president Dave Regan said.
Clara Ence Morse and Scott Clement contributed to this report.
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