Key facts
- Senator Bernie Sanders is supporting a California ballot measure to tax billionaires.
- The proposed tax is 5% on the net worth of California residents with at least $1 billion.
- Supporters need 874,641 signatures to place the measure on the November 2026 ballot.
- The tax is estimated to generate tens of billions of dollars, with 90% for healthcare.
- Governor Gavin Newsom has criticized the proposal.
Senator Bernie Sanders is lending his support to a proposed California ballot initiative that would levy a one-time 5% tax on the net worth of the state's billionaires, potentially increasing the visibility of a significant measure for the 2026 election cycle. The California Billionaire Tax Act, backed by SEIU-United Healthcare Workers West, is expected to begin signature gathering soon. To appear on the November 2026 ballot, proponents must collect 874,641 valid signatures.
The proposal targets California residents with a net worth of at least $1 billion as of January 1, 2026, estimated to affect around 250 individuals. The Legislative Analyst’s Office (LAO) projects the tax could generate tens of billions of dollars. Ninety percent of these funds would be allocated to healthcare, primarily to mitigate potential federal cuts to Medi-Cal, with the remaining revenue directed towards food assistance and public education.
Supporters, including Teamsters California and Representative Ro Khanna, argue the measure addresses growing wealth inequality and anticipated reductions in federal health spending. Economists Emmanuel Saez and Thomas Piketty, who have advised on the proposal, state it is specifically designed for billionaires to minimize broader economic disruption.
However, the LAO has also highlighted potential long-term risks. While the tax could provide a substantial one-time revenue boost, the office cautioned that it might decrease annual state income tax collections by hundreds of millions or billions of dollars if some billionaires relocate. The departure of high-income taxpayers could permanently shrink the state's personal income tax base, potentially straining the state's General Fund, which supports essential services like schools and prisons. The new wealth tax revenue is largely earmarked for health care and food programs, while any loss in income tax revenue would affect a wider range of budget items.
Opposition has been vocal. Governor Gavin Newsom has voiced criticism, and allies are forming a committee called “Stop the Squeeze.” San Jose Mayor Matt Mahan, a notable Democratic critic, has used the measure to differentiate himself as a moderate, pro-tech figure, gaining support from prominent tech leaders like Y-Combinator CEO Garry Tan.
Business groups and venture capitalists contend that the measure would encourage capital flight and lead to prolonged legal challenges. A key point of contention is the initiative's treatment of certain preferred or dual-class shares, with critics arguing that valuing shares with enhanced voting power at a multiple of their market price could significantly increase tax liabilities for founders.