Key facts
- A proposed 5% one-time tax on billionaires' net worth in California is gathering signatures for the November 2026 ballot.
- The tax would apply to residents as of January 1, 2026, with payments due in 2027.
- Estimated revenue of $100 billion is projected, but significant wealth has already left the state.
- Wealthy individuals have relocated, potentially reducing future state income tax revenues.
- The proposal faces constitutional challenges and administrative complexities.
A proposed ballot measure in California, known as the 2026 Billionaire Tax Act, aims to impose a one-time 5% tax on the net worth of billionaires residing in the state as of January 1, 2026. The initiative, which requires signature gathering to appear on the November 2026 ballot, is designed to generate an estimated $100 billion in revenue, primarily for health care services. However, the proposal has already led to concerns about capital flight, with some wealthy individuals reportedly relocating to states like Texas and Florida to avoid the tax. This exodus could result in a significant decrease in California's future income tax revenues. Furthermore, the measure faces substantial constitutional challenges, particularly concerning its retroactivity and potential impact on business valuations and market competitiveness. Governor Gavin Newsom has publicly opposed the initiative, citing the negative economic consequences of wealthy residents leaving the state.