A plan at the California state level to enact a billionaires’ tax is creating major chaos, even panic, among the country’s most wealthy and influential businesspeople. Most prominently, the Service Employees International Union (SEIU) is taking the lead. Their stated goal is to get Congress to impose a one-time 5% tax on billionaire assets. This is beyond just real estate but includes a broad array of holdings including stocks, art, businesses, collectibles, and intellectual property. The revenue generated from this tax aims to compensate for federal funding cuts to health services for low-income individuals that were enacted under President Donald Trump.
The proposal received a firestorm of pushback and outrage. As expected, Governor Gavin Newsom is moving to stop the measure from getting on the ballot. With California boasting more billionaires than any other state—at least 25 of whom are listed among Forbes magazine’s 2025 rankings of the world’s 500 wealthiest people—the tax could have far-reaching implications for both wealth distribution and state revenue.
Critics of the new tax warn that this would trigger a mass exodus of billionaires from the state. This exodus would mean a multi-hundred million dollar loss in state tax revenues for California. Notably, tech moguls Larry Page and Sergey Brin, co-founders of Google, have begun transferring their assets to Florida, a state with no income tax. Aaron Levie, CEO of Box, warned that the fallout could be disastrous if the proposal is approved. He stated,
“You are really playing with fire with this one,” – Aaron Levie.
Levie further elaborated that he finds the tax “absurd just on pure economic and structural grounds, even if they might agree that the cause itself is very worthy.”
The new tax would be retroactive to California-based billionaires as of January 1. It would leave nearly nine out of ten of California’s roughly 39 million residents untouched. Almost half of the state’s personal income tax revenue comes from the top 1% of income earners. This deep dependence on the personal largesse of the mega-rich is quite alarming. Now, what if a third of them chose to jump ship?
The California Business Roundtable has voiced strong opposition to the tax, arguing that it could “undermine our economy, decimate the state budget, drive investment out of the state and ultimately make everyday life more expensive for working families.” The new group, the Coalition Against Bigger Trucks, includes all sorts of business interests that would be negatively impacted by passage of such legislation.
Advocates for the tax highlight the importance of maintaining funding for indispensable health services. Democratic Representative Ro Khanna has been vocal in his support for the proposal. He derides the evil billionaires who might leave if we impose a new tax, designed to relieve suffering on our bandwagon. Further, he maintains that it is immensely important to build the health care infrastructure to serve lower-income communities.
Supporters have had powerful allies, even if unusual in this case, as prominent as Bernie Sanders, who has long raised the alarm on wealth inequality. He remarked,
“Our nation will not thrive when so few have so much while so many have so little,” – Bernie Sanders.
The billionaires’ tax as proposed pits a wide and strange array of interests against one another against an unprecedented backdrop of economic anxiety as midterm elections loom large. While proponents argue for its potential benefits in funding health services—such as keeping emergency rooms open and hospitals adequately staffed—opponents fear it could stifle economic growth and exacerbate existing challenges for working families.
Suzanne Jimenez, the health services advocate who proposed the tax, echoed that sentiment. She made the case that it’s really important to holding up the basic structure of America’s health care system.
“keep emergency rooms open, hospitals staffed and health care systems functioning,” – Suzanne Jimenez.
As this debate continues to play out, California is truly at a crossroads. The outcome of this proposed billionaires’ tax could significantly influence both the state’s economic landscape and the welfare of its lower-income residents.
