Healthcare workers and other supporters with the Billionaire Tax Now coalition hold placards during a media briefing in Los Angeles on April 27, 2026. The initiative would levy a one-time 5% tax on California billionaires.
Frederic J. Brown/AFP via Getty Images
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A battle over a first-of-its-kind tax on billionaires is heating up in California, with tech moguls pumping millions of dollars into a campaign to defeat it and union leaders who support the measure insisting the state's very wealthiest residents should pay their fair share.
Voters in November will be asked whether to pass the ballot measure, known as Proposition 40, which imposes a one-time 5% tax on the assets of the nearly 250 billionaires in the state. Backers say the new revenue would mostly fund healthcare services.
The tax was envisioned by union leader Dave Regan, who said millions of the state's neediest patients could lose health insurance in the coming years, driven largely by President Trump's 2025 tax and spending bill. Dubbed by the White House the "One Big Beautiful Bill," the law slashes federal funding to California and other states.
"Proposition 40 was developed specifically to backfill those cuts from the One Big Bill that are scheduled to take effect in the next five years. It is a five-year solution to that plan," said Regan, who is the president of the SEIU United Healthcare Workers West.
If passed, the measure would direct 90% of the tax revenue to fund healthcare services and the other 10% to food assistance and public education across California.
"We're not even talking about the top 1%, we're talking about the top 0.0001%, the billionaires: 250 individuals in California, $2.4 trillion worth of wealth, and that's an amount of money equivalent to the annual income of all Californians who are not billionaires, including extraordinarily wealthy people," Regan said.
But the populist fervor fueling supporters of the measure is being met with a growing coalition of resisters, from tech billionaires to other unions and some state Democrats. That includes Democratic Gov. Gavin Newsom, who has said the tax would hurt the state's economy, which is powered by profitable tech companies in Silicon Valley that have spawned many of the billionaires who would be taxed under the measure.
Opponents of the tax argue it offers a short-term fix to a long-term problem and could ultimately backfire.
"I'm not against taxes. But this is not the right tool. What we need to develop is something that is stable and consistent," said René Bravo, president of the California Medical Association, in an interview with NPR. "Human beings need and deserve health care that is financed in such a way that you're not increasing the insecurity."
Bravo argues Proposition 40, if passed, would make patients more unstable by providing them with bridge coverage now, but no longer-term solution — making it difficult to plan out medical coverage over many years. Bravo also said he does not trust state lawmakers to spend most of the new revenue on healthcare, speculating that they could direct the money to other pet projects.
"Not accurate, not true," responded union leader Regan. He said voters face a choice between more immediate healthcare funding for Californians or none at all, and that a third way being proposed by some critics is not on the ballot.
Another major rift between both sides of the fight is whether the first-of-its-kind state wealth tax would drive billionaires out of California.
It's a crucial issue, since California's Chamber of Commerce estimates 1% of the state's residents pay nearly 50% of all personal income taxes.
Few disagree that a mass flight of the ultra-rich would throw California's budget into a tailspin, but the measure has sparked a fierce debate about whether billionaires will actually pack up and leave the state.
