A Radical New Proposal to Tax Wealth, Not Income
California’s progressives are once again looking to tax their way out of financial trouble. A new ballot initiative, dubbed the 2026 Billionaire Tax Act, proposes a one-time 5 percent levy on the net worth—not income—of anyone worth more than $1 billion. It’s being pushed by labor unions and health care activists who claim the tax would generate about $100 billion to plug holes in the state’s health care system and fund public education.
The measure is the brainchild of Jim Mangia, CEO of St. John’s Community Health, and Suzanne Jimenez, with strong backing from the Service Employees International Union (SEIU). Their goal is to offset what they call $30 billion in lost federal health care funding following President Trump’s One Big Beautiful Bill Act, which reduced federal spending on Medicaid reimbursements.
How It Would Work
If enacted, California’s roughly 200 billionaires would each face a one-time tax on their total global assets, including private companies, real estate, art, and stocks. The initiative requires nearly 875,000 signatures to qualify for the November 2026 ballot.
Ninety percent of the proceeds would go toward Medi-Cal, the state’s version of Medicaid, and 10 percent would be funneled to K–12 public education. The money would be deposited into a special “Billionaire Tax Reserve Account,” capped at $25 billion in withdrawals per year.
Supporters frame it as a fair redistribution of wealth. “If we do not do this, millions of people are going to lose health care,” said Dave Regan, president of SEIU-United Healthcare Workers West. UC Berkeley economist Emmanuel Saez, a longtime advocate of wealth taxation, has called the plan “a small, fair contribution” relative to what billionaires earn each year.
Who It Targets
The tax would hit some of the world’s wealthiest figures—Mark Zuckerberg, Larry Page, Sergey Brin, Larry Ellison, Reed Hastings, and Jensen Huang—many of whom built their fortunes in California’s innovation economy. Together, California’s billionaires hold around $2 trillion in wealth, meaning a 5 percent tax could theoretically raise $100 billion in a single year.
But that’s a big “if.” As economist Enrico Moretti warned, even a one-time wealth grab would “increase the chances of these people relocating” and “reduce the likelihood that they bring their companies or employees to California in the future.”
The Exodus Already Underway
The proposal comes as tens of thousands of residents and businesses flee California, citing high taxes, crushing regulations, and poor governance. Between 2023 and 2024, more Americans left California than any other state, according to Census Bureau data. Florida and Texas—both without state income taxes—are the top destinations.
Prominent entrepreneurs have already headed for the exits. Elon Musk moved Tesla’s headquarters to Texas in 2020. Tech founders, venture capitalists, and hedge fund managers are following suit, often citing California’s anti-business climate. As one Miami developer put it, “Miami represents a new start—a place where policies, economics and lifestyle align together very well.”
If California passes a wealth tax, it could accelerate that exodus, taking jobs, innovation, and tax revenue with it.
The Illusion of “Free Money”
Proponents argue the tax is modest – just 5 percent once—but that claim ignores how wealth taxes distort investment, drive out capital, and punish success. The state’s billionaires have already paid enormous sums in federal and state income taxes over the years. Many of their fortunes are tied up in illiquid assets, meaning they would need to sell stock or businesses simply to pay Sacramento.
Critics say it’s classic socialist fantasy – politicians and activists spending other people’s money instead of fixing their own fiscal mismanagement. Even if the plan works temporarily, the long-term consequences could be devastating. Once wealth leaves, it rarely comes back.
The Bigger Picture
This proposal would make California the first state in America to tax net worth directly, setting a precedent for other left-leaning states to follow. Advocates insist it’s about fairness; opponents see it as a war on success.
As one financial adviser observed, “California keeps testing how far it can push wealth before wealth pushes back.”
If the so-called Billionaire Tax Act succeeds, it could hasten California’s transformation from the Golden State to the Gone State—a place where prosperity itself becomes the crime.
FAM Editor: Socialist never seem to see that trying to make rich people poor does nothing to make poor people rich. I predict that if this goes on the ballot, almost every billionaire in the state will establish residence in another state before it gets voted on.
