A proposal to tax billionaires in California could generate up to $100 billion to help offset federal health care cuts.
U.S. Senator Bernie Sanders has thrown his support behind the effort, while several high-profile billionaires have reportedly warned they may leave the state if the measure moves forward.
State labor groups are pushing for a one-time, 5% emergency tax on some of California’s wealthiest residents.
“We are calling on California’s approximately 200 billionaires to step up,” said Renee Saldana, a spokesperson for SEIU United Health Care Workers West.
Many of those affected would be leaders of major companies based in Silicon Valley and San Francisco.
If the campaign gathers enough signatures, the proposal will appear on the statewide ballot in November. SEIU-UHW says the tax would help close a massive funding gap caused by federal health care cuts.
“Right now, a massive $100 billion cut is going to hit California’s health care system when we roll into 2026,” Saldana said.
Supporters argue the emergency billionaire tax would prevent a statewide health care collapse.
“This would help keep ERs open and keep health care workers serving patients,” Saldana said.
Congressman Ro Khanna, who represents much of Silicon Valley, supports the proposal, calling it beneficial for American innovation. A spokesperson said Khanna has “always supported a modest wealth tax on billionaires to deal with staggering inequality and to make sure people have healthcare.”
Governor Gavin Newsom, however, has voiced opposition to the wealth tax. Speaking at the New York Times DealBook conference in December, he said California needs to take a pragmatic approach.
“It’s not something to be panicked about, but it’s part of the broader concern and narrative in this country of the haves and have-nots — not just income inequality, but wealth inequality,” Saldana said.
Several tech billionaires have suggested they might leave California if the tax is approved. The proposal would apply retroactively to anyone living in the state on Jan. 1, 2026.
“We’ve heard big names like Peter Thiel and others that are threatening to leave,” said Logan.
White House adviser and tech investor David Sacks, a San Francisco billionaire, posted on X:
“…after blindly funding the Left for years, Silicon Valley is finally realizing what time it is. Dinner time. And they’re on the menu.”
San Francisco State University labor professor John Logan said he believes only a small number of billionaires would actually relocate.
“Most tech billionaires — who could easily afford to pay this 5-percent one-off tax — are not going to upend their lives and move to Austin, Texas, Florida, or elsewhere, given all the advantages they enjoy,” Logan said.
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