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California is heading toward a major political and economic debate as a proposed tax targeting billionaires gains momentum while triggering fierce opposition from wealthy individuals and business leaders.
The proposal, known as the Billionaire Tax Act, aims to impose a one-time 5 percent tax on Californians with a net worth exceeding $1 billion. Supporters argue that the measure could generate tens of billions of dollars to fund healthcare, education, and food assistance programs. Critics, however, warn that it could drive high-net-worth individuals and businesses out of the state.
What the Proposal Would Do
If approved, the tax would apply to roughly 200 billionaires living in California as of January 1. About 90 percent of the revenue would be directed toward healthcare services, while the remainder would support public education and food assistance programs.
The tax would become due in 2027 and would exclude assets such as real estate, pensions, and retirement accounts. Eligible taxpayers could spread payments over five years, though doing so would increase the overall cost.
Rising Pushback From the Wealthy
Even before reaching the ballot, the proposal has sparked visible resistance. Several prominent business figures have begun distancing themselves from California, citing concerns over the tax climate.
Companies linked to Google co-founders Larry Page and Sergey Brin have shifted some business registrations out of the state. Palantir co-founder Peter Thiel opened an office in Miami, while Oracle founder Larry Ellison has continued reducing his presence in California after selling high-value properties.
DoorDash co-founder Andy Fang publicly criticized the proposal, saying it makes planning an exit from the state a responsible decision.
Supporters of the tax dismiss these moves as exaggerated warnings, arguing that most wealthy individuals remain rooted in California due to business ties, lifestyle factors, and market access.
What It Takes to Become Law
For the measure to reach voters, supporters must gather nearly 875,000 valid signatures by late June. If successful, it would appear on the November ballot, where approval would require a simple majority.
Legal challenges are also expected. Attorneys representing wealthy clients have indicated that constitutional challenges would follow if the proposal passes.
Political and Economic Uncertainty
California Governor Gavin Newsom has voiced opposition to wealth taxes in the past, and similar proposals have failed in previous years. However, national figures such as Senator Bernie Sanders and Representative Ro Khanna have expressed support for the idea.
Economic analysts remain divided. Some estimate the tax could raise tens of billions of dollars, while others warn it could reduce long-term revenue if high earners relocate or restructure their assets.
Can the Tax Fix California’s Problems?
Supporters believe the proposal could raise up to $100 billion and help address long-standing funding gaps. Critics counter that it offers a short-term solution to deeper structural budget challenges and could increase financial volatility.
As signature gathering continues, the billionaire tax debate is shaping up to be one of California’s most closely watched political fights, with implications for taxation policy far beyond the state.
