Unlikely Coalition Opposes California Billionaire Tax
A strange political alignment is reshaping California’s tax debate. An unlikely coalition of progressive advocacy groups, labor unions, and tech billionaires has launched a campaign to oppose the state’s proposed “Billionaire Tax Act” — a one-time 5% wealth tax on California’s roughly 200 billionaires that would generate an estimated $100 billion for healthcare, food assistance, and public education. With a June 25 deadline for the measure to qualify for the November ballot, the battle has scrambled traditional ideological lines in ways that few predicted.
The Proposal at a Glance
The “One-Time Wealth Tax for State-Funded Health Care Programs Initiative,” drafted by tax law professors from UC Berkeley, UC Davis, and the University of Missouri, would impose a 5% tax on the net worth of California residents worth over $1 billion as of January 1, 2026. Sponsored by SEIU United Healthcare Workers West (SEIU-UHW), the measure has already collected 1.6 million signatures — nearly double the 874,641 required — as the Santa Barbara Independent reported.
Supporters, including Senator Bernie Sanders and former Labor Secretary Robert Reich, argue the tax is a necessary response to federal healthcare cuts. “It’s a practical way to keep the healthcare system functioning,” Reich said. Nvidia CEO Jensen Huang, who would personally pay roughly $8 billion under the tax, told reporters he was “perfectly fine with it.”
The Unlikely Opposition
What makes this story remarkable is who is opposing the measure — and why.
Governor Gavin Newsom has emerged as the most prominent opponent, telling Politico the proposal “makes no sense” and is “really damaging to the state.” He’s joined by several Democratic gubernatorial candidates, including former U.S. Rep. Katie Porter and former HHS Secretary Xavier Becerra.
But the most surprising voices come from the left. Planned Parenthood Affiliates of California and the California Medical Association have jointly opposed the tax, describing it as a “flawed response” to healthcare cuts. The California Teachers Association (CTA) — one of the state’s largest teachers unions — voted to oppose, stating the tax “will not provide the sustainable and long-lasting funding that our schools and communities deserve.”
Housing advocacy groups like California YIMBY have also joined the opposition, fearing the tax would discourage investment and worsen the state’s housing shortage. Several labor groups object because 90% of proceeds would go to healthcare, leaving relatively small amounts for education and food assistance.
Billionaire-Backed Counteroffensive
On the other side of the same coalition, tech billionaires are pouring money into the fight. Building a Better California, co-founded by Sergey Brin and Eric Schmidt, has raised over $80 million in the first quarter of 2026 alone. The group is backing three competing ballot measures designed to curb or nullify the billionaire tax, including a constitutional amendment to forbid retroactive taxation.
Notable billionaire opponents include Bill Ackman, Mark Cuban, Ray Dalio, Peter Thiel, and Larry Page. Six of California’s estimated 214 billionaires have already left the state before the January 1 eligibility cut-off, including Thiel, Travis Kalanick, Page, and Brin. Forbes has reported a real estate boom on Nevada’s side of Lake Tahoe driven by billionaires purchasing lakefront homes.
Economic Debate: Revenue vs. Exodus
The economic impact of the tax is fiercely contested. SEIU-UHW estimates it would generate $100 billion, and UC Berkeley economists Emmanuel Saez and Gabriel Zucman argue that even if all billionaires left, it would take 25 years for the loss of their tax payments to surpass the one-time revenue.
Skeptics counter with stark warnings. The California Legislative Analyst’s Office projects a temporary revenue increase of “up to tens of billions” but warns of hundreds of millions in annual income tax losses due to departures. The Hoover Institution estimates the net effect would be negative by almost $25 billion. UC Berkeley Professor Enrico Moretti warned the tax “has the potential to completely destroy California’s economy.”
The Washington Post editorial board described the initiative as “self-destructive,” stating it “has already cost the state more in lost future revenue from income taxes than it would raise.”
What’s at Stake
The June 25 deadline creates a binary outcome: either the measure qualifies for the November ballot or it doesn’t. Newsom is reportedly pressuring SEIU-UHW to withdraw the signatures, though the union has shown no signs of backing down.
If the measure qualifies, California voters will face a high-stakes, high-spending ballot battle that could reshape national conversations about wealth taxation. If it passes, California would become the first U.S. state to impose a direct wealth tax, potentially inspiring similar measures elsewhere.
The deeper story here is about fractured coalitions. The split among labor unions — with SEIU-UHW supporting and other unions opposing — could reshape how progressive alliances form around future tax initiatives. And the sight of Democratic Governor Newsom leading opposition to a tax on billionaires, alongside organizations like Planned Parenthood and the teachers union, reveals just how complex the politics of wealth redistribution have become in the Golden State.
As the June 25 deadline approaches, one question looms: Can a tax that unites Planned Parenthood and Peter Thiel in opposition possibly survive at the ballot box?