On Feb. 18, the campaign for the 2026 Billionaire Tax Act was launched, an act that would impose a one-time 5% tax on billionaires across California. Tension has been rising between Gov. Gavin Newsom and Sen. Bernie Sanders of Vermont due to their opposing opinions on taxing billionaires.
Sanders, Rep. Ro Khanna and Tony Thurmond, California State Superintendent of Public Instruction, endorsed the proposal, which would be applicable to 938 billionaires residing in the United States; their estimated debt is $8.2 trillion. This tax differs from conventional taxing methods, which applies to total income, and would be applicable to one’s net worth. Further, Sanders has stated that the revenue would mainly go to health care and the remaining would be given to K-12 education.
“I don’t think [raising money for welfare] is gonna work,” said senior Matt Hagedorn. “If they can, [billionaires will] find a way to hide their assets or do something to it so they don’t have to pay the taxes.”
Here are the two major interest groups advocating for and against this tax. The Service Employees International Union, a major health care union, supports the act, due to the ballot measure’s support of the healthcare system. There have been $3.5 million in donations supporting the act, which helps SEIU-Union of Healthcare Workers gain signatures and continue campaigning. The SEIU-UHW has gathered 25% of the 874,641 signatures required by the act. Building a Better California is a non-profit, non-partisan organization sponsoring three initiatives that rival the tax: the first would prevent retroactive taxation and the second would change the state constitution and forbid the implementation of new taxes after Jan. 1. Such taxes would not be implemented on personal accumulation of savings, like retirement holdings and personally owned capital. The third would mandate that any ballot initiatives or laws implemented after Jan. 1 require departments who obtain earnings to allocate the money earned from the tax into more popular programs. They have reportedly received $35 million in donations.
Those opposing the act include California’s governor, Gavin Newsom, Rep. Kevin Kiley and California Business Roundtable. According to Ballotpedia News, Jack Guidi from Americans for Tax Reform stated that Sander’s tax would deteriorate California’s long-term tax base and disadvantage the state compared to the rest of America. Gov. Newsom has argued that such a tax will drive out billionaires, causing an economic decline, tax dollar losses and loss of services for Californians due to federal funding cuts. Technology companies in Silicon Valley have said they are willing to leave California if the tax is implemented.
“Traditionally, taxing billionaires is very hard,” Hagedorn said. “[It’s been seen] in France [and] Spain. When [one taxes] billionaires, it does lead to capital flight … billionaires are already leaving California for Florida, for Texas; you do risk losing major tax revenue, [and] major economic activity from that. Billionaires [and] rich people in general always try to find a way to not pay those taxes, or to pay less.”
Sergey Brin and Larry Page, the founders of Google, have relocated their capital outside of California; Newsom has had close ties with both founders, and used them in his arguments against Sander’s proposal, stating that their choice to move assets outside of the state is evidence that billionaires will leave if such a tax is implemented.
“I understand that it’s ridiculous that we have billionaires, [while] we have such difficult conditions for so many people in this country,” said senior Oscar Nicolson. “If you do a tax at a state level, it’s relatively easy for people to leave. If it’s a recurring [tax], people are definitely going to leave.”
Further, if the act is passed in the midterm, Newsom would be unable to veto the tax. Sanders has consistently been holding rallies and pushing his proposal to voters as a means of gaining public approval for midterm elections.
