A measure proposed in California aims to tax the wealth of billionaires. However, this effort might lead the state to lose billions in future tax revenue even before it reaches the ballot.
The proposed ballot measure, known as the 2026 Billionaire Tax Act, would levy a one-time 5% tax on billionaires’ assets. The measure is still in the process of collecting the 90,000 signatures required to present it to voters in November. But it is already facing strong opposition from several of the state’s wealthiest residents—and from its Democratic Governor Gavin Newsom.
“This will be defeated. I have no doubt,” Newsom told on Monday, after a speech in which he described the proposal as “really harmful” and “bad economics.”
“I’ll do what I must to protect the state,” he added.
Newsom stated that a wealth tax that takes from billionaires’ assets rather than their incomes is “very, very different” from the state’s progressive income tax, which already taxes high earners at the highest tax rate in the country. He also said that he would be more receptive to a similar proposal implemented at the federal level.
“It’s one thing to consider the nation as a whole and talk about 50 states. It’s another when you’re competing against 49 other states,” he said.
The push for the ballot measure is being led by a healthcare workers’ union, SEIU-UHW, which is calling for the increase to offset federal cuts to healthcare, education, and food assistance in the state under President Donald Trump’s sweeping “Big, Beautiful Bill.”
“We’re urging California’s billionaires to step up and pay a one-time, emergency 5% tax to prevent the collapse of California healthcare and help fund California public K-14 education and state food assistance programs,” the union’s states.
It notes that the bill would only affect approximately 200 people with a combined net worth of $2 trillion.
California has more billionaires than any other state. But in the face of the proposed tax, a few are already beginning to sever ties with California and transfer their assets elsewhere, including Google co-founder Larry Page, Paypal co-founder Peter Thiel, Craft Ventures co-founder David Sacks, and Oracle CEO Larry Ellison. And more have threatened to leave.
Several made significant moves before the residency cut-off date for the ballot measure. Page bought $173 million worth of property in Miami while moving assets out of California. Thiel also targeted Miami as a destination, with his investment firm, Thiel Capital, announcing on the last day of 2025 that it had opened an office in the city. Earlier in the month, Sacks similarly announced that his firm had opened an office in Austin, Texas, and that he had relocated to the city from San Francisco.
“This is my fear,” Newsom said to.
“It’s exactly what I warned against. It’s happening.”
In December, attorney Alex Spiro, whose elite clientele includes billionaires like Tesla CEO, wrote a letter to Newsom warning him that the proposed ballot measure would “trigger an exodus of capital and innovation from California” and emphasizing, “Our clients have made it clear they will permanently relocate if subjected to this tax.”
This is not the first time a has been proposed in California. A proposal in 2024 introduced by Assemblymember Alex Lee aimed to impose a 1% annual tax on those with more than $50 million, and 1.5% for billionaires. Newsom has rejected such previous proposals as well.
Some billionaires, however, are not opposed to the 2026 Billionaire Tax Act, including Nvidia CEO and President Jensen Huang, who said he was “perfectly okay” with the proposal in an interview on.
“We chose to live in Silicon Valley, and whatever taxes they want to apply, so be it,” he said.