California’s proposed billionaire tax remains headed toward the November ballot after Governor Gavin Newsom rejected an offer from SEIU-UHW to reduce the measure from a one-time 5 percent tax to 2 percent.
Union Offered to Cut the Tax Before the Withdrawal Deadline
Service Employees International Union-United Healthcare Workers West spent months collecting signatures for a ballot initiative that would impose a one-time 5 percent tax on California billionaires.
A day after officials confirmed the measure had enough signatures for the November ballot, the union offered to reduce the proposed rate to 2 percent if Newsom backed the smaller version through the state legislature.
The offer came in a Thursday letter from SEIU-UHW president Dave Regan. The union said it would withdraw the 5 percent measure before the June 25 deadline if the governor supported the 2 percent legislative version.
Supporters described the lower levy as a modest option for keeping emergency rooms open and saving patient lives.
Newsom Rejected the Proposal
Newsom rejected the offer shortly after receiving it.
His office said reducing the rate would not fix what he considers a “poorly designed state-only measure.” Newsom argues the proposal would defund teachers, schools, clinics, and public safety.
He has opposed a California wealth tax since 2020. A state budget passed this week instead relies on an extended levy on healthcare providers.
What the Ballot Measure Would Do
The measure would impose a one-time 5 percent charge on any California resident whose net worth exceeded US$1 billion on January 1, 2026.
Proponents estimate the tax would raise US$100 billion.
Most of the revenue would be used to backfill federal healthcare cuts signed into law last year. Smaller portions would go toward food assistance and public education.
The union estimates that about 200 California residents would fall within the tax’s reach.
Billionaire Departures and Revenue Risk
Six billionaires had already left California before the January 1, 2026 cutoff.
According to the union’s own calculations, those departures removed about US$26.8 billion in taxable wealth, more than a quarter of the projected tax base.
The nonpartisan Legislative Analyst’s Office expects the tax to raise tens of billions of dollars early, but also expects it to reduce annual income tax revenue by hundreds of millions of dollars if wealthy residents relocate.
California receives nearly half of its personal income tax revenue from the top 1 percent of earners, making taxpayer relocation a central concern for opponents.
Opposition Campaign
Sergey Brin, one of Google’s founders and one of the billionaires who left California, has contributed US$82 million to Building a Better California.
The group has raised more than US$118 million from fewer than a dozen donors.
It is advancing measures intended to blunt the billionaire tax if voters approve it.
What Happens Next
SEIU-UHW has until June 25 to withdraw the measure.
If no deal is reached, the 5 percent billionaire tax will appear before California voters in November.
Source article: www.imidaily.com
