California billionaire tax qualifies for November ballot

A wildly controversial measure to tax California’s billionaires has
qualified for the November ballot, Secretary of State Shirley Weber said
in a memo to California election officials Wednesday evening, ensuring a
brutal and expensive campaign that will take place as voters also decide
which party will control Congress and the governorship. 

The measure, backed by the powerful healthcare workers union Service
Employees International Union-United Healthcare Workers West, would
impose a one-time, 5% tax on anyone worth over $1 billion. It would
apply retroactively to people living in California on Jan. 1, 2026. The
tax would be paid in 2027, or billionaires could opt to spread the
payments out over five years, but would have to pay more for that
option. 

The plan reflects an attempt to tax billionaires’ total wealth, since
many get their money from sources that go far beyond a salary —
including stocks and other investments and the value of their business
holdings. But real estate and retirement accounts would not count toward
a person’s taxable wealth. 

The money generated would be directed into special funds administered by
the state controller and the Franchise Tax Board and would mostly go
toward health care spending, which has been severely cut under President
Donald Trump and the Republican-led Congress. The nonpartisan
Legislative Analyst’s Office estimated the tax would generate tens of
billions of dollars for the state over several years, but cautioned it
would be hard to predict the ultimate total because of many factors. 

“Most Californians and most billionaires recognize how reasonable and
necessary this proposal is — both to keep emergency rooms open and to
save California businesses from closing,” Suzanne Jimenez, chief of
staff at SEIU United Healthcare Workers West, said in a statement in
late April when backers announced they’d turned in 1.55 million
signatures to qualify the measure. “A very small group of the most
controversial billionaires on the planet tried to stop Californians from
being able to save their local emergency rooms and hospitals.” 

The measure has drawn intense opposition for months, especially from
uber wealthy tech titans and from politicians on both sides of the
aisle. 

A handful of powerful billionaires, led by Google co-founded Sergey
Brin, has poured over $90 million into a PAC called Building a Better
California that is working to defeat the measure. Brin alone has donated
$57 million, according to campaign finance records. 

The proposal has divided Democrats in the heavily blue state. Gov. Gavin
Newsom forcefully opposes the measure, as does Xavier Becerra, the
leading candidate to succeed Newsom as governor. Sen. Bernie Sanders and
Rep. Ro Khanna, D-Santa Clara, have endorsed the plan and introduced a
similar effort at the federal level. 

An opposition group backed by health care and education groups, which
typically back liberal causes in the state, also launched in June. Its
backers told the New York Times they don’t believe the tax would address
their groups’ needs and worry it could threaten future attempts to pass
more long-term measures to bring in new revenue. 

Building a Better California is also funding multiple prospective ballot
measures that would invalidate or water down the billionaire tax. A
separate measure, backed by the CEO of the California Hospital
Association, would sharply restrict health care unions’ ability to
advance ballot measures in the future, a possible violation of those
unions’ First Amendment rights. None of those measures has yet qualified
for the November ballot. 

https://www.sfchronicle.com/politics/article/billionaire-tax-qualifies-22
228531.php