It’s on. The nation’s first tax on net worth is set to go before California voters on Nov. 3, and America’s oligarchs will be paying close attention.
If it passes, the proposed California Billionaire Tax Act would impose a one-time, 5 percent levy on residents whose wealth exceeds $1 billion. Much of the estimated $100 billion that would be raised by the tax would fund healthcare for low-income people, a reflection of the priorities of the initiative’s proponents, the SEIU-United Healthcare Workers West union.
And if the past six months are any indication, it’s going to be an epic and expensive election battle, full of the-sky-is-falling warnings, class warfare rhetoric, bombastic ads and endless mailers. Billionaires have already dropped millions trying to keep it off the ballot, including qualifying not one but two competing initiatives on the same ballot in a sneaky effort to undermine the tax.
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Although billionaires will barely feel this relatively small levy paid over five years (their annual investment returns should more than cover it), the bigger worry is that it would crack open the door to a tide of tax-the-rich initiatives across the nation that could eat away at their fortunes and influence. Before you know it, the second Gilded Age could be over before it really got going.
It’s a reasonable fear. Taxing wealth has historically been unpopular among Americans, who see the amassing of fantastic fortune as a birthright. But that attitude has shifted in recent years as the nation’s wealth has accumulated in the hands of just a few.
And this particular tax is popular among Californians, particularly those under 45 who are struggling with historically high housing costs, burdensome student loan debt and the prospects that artificial intelligence is coming for their jobs. In May, the highly respected nonpartisan Public Policy Institute of California found 54 percent support of the tax among likely voters, a figure that ballooned to 67 percent for respondents between 18 and 44. A more recent but smaller poll, by Tulchin Research, showed a more modest 41 percent support, though with a 3 percentage point margin of error, it could easily be reflecting a truly deadlocked measure.
California’s billionaires are clearly not expecting much sympathy from a public feeling financially pinched while their own fortunes grew a whopping 144 percent between 2023 and 2025. Long before the initiative qualified for the ballot, billionaires had already begun scheming up ways to avoid the proposed tax through complicated measures to artificially lower their net worth or by relocating to out-of-state properties (a ploy that may not be as simple as spending all of your time elsewhere).
The billionaire tax is a clear test of the level of antipathy for the ultrarich and the public’s appetite for taxing them, but it may also be a stress test for the Democratic Party. Republicans universally loathe the measure, but it has divided California’s Democrats and their traditional allies in the labor union.
On one side are progressives like Rep. Ro Khanna, a Democrat who represents Silicon Valley, who along with Sen. Bernie Sanders of Vermont authored legislation for a 5 percent wealth tax called the “Make Billionaires Pay Their Fair Share Act.” During a June 25 press conference organized by proponents of the tax, he made the battle lines clear: “Are you for a one-time tax on 250 people for 5 percent so that millions of Californians can get healthcare? Or are you on the side of protecting the 250 billionaires?”
Elmira Muradkhanyan
Taking the other side are moderate Democrats such as Gov. Gavin Newsom, who tried to broker a deal to keep the tax off the ballot; his presumed successor, Xavier Becerra; and some labor unions, such as the powerful California Teachers Association. Newsom and others argue that the state’s budget is already overly reliant on high-earning residents and fear this one-time tax might do more harm than good if it chases away the tech and Hollywood titans who have made the state such an economic powerhouse. (Similar unfounded fears dogged the 2022 “millionaires tax” ballot question in Massachusetts, which became law and is now surpassing revenue expectations.)
Newsom is in a particularly tricky spot as he considers a 2028 presidential run. He can’t afford to alienate wealthy donors, but he needs support from the billionaire-loathing progressives to get through the primary. His solution isn’t likely to please either group. In a video and statement posted online the day after the state’s billionaire tax proposal was finalized for the ballot, he said he would be voting “no” on the ballot measure and said a national billionaire tax would be a better alternative.
“The system is fundamentally broken. The federal tax code, the corporate tax code, and the inheritance tax code seem to be written for a different set of Americans. It’s time for an economic reset,” he said.
He’s not wrong — but his words ring hollow given that Congress and presidents are typically beholden to wealthy patrons and that there is no federal initiative process to bypass them. That means that the best hope of kicking off an economic revolution may be right in front of him on Nov. 3.
This column originally appeared in the Boston Globe, where I am a contributor to the Opinion section. It is reprinted with permission.
