by Nicholas Ballasy
A ballot initiative currently being prepared for November 2026, known as Initiative 25-0024 or the “2026 Billionaire Tax Act,” would impose a one-time 5% levy on the net worth of individuals and trusts with at least $1 billion in assets as of January 1, 2026.
California is at the center of a contentious national debate over wealth taxation as state leaders and advocates of economic redistribution push for the creation of a substantial tax on the unrealized gains of the state’s wealthiest residents despite public polling showing most voters oppose such taxes.
A ballot initiative currently being prepared for November 2026, known as Initiative 25-0024 or the “2026 Billionaire Tax Act,” would impose a one-time 5% levy on the net worth of individuals and trusts with at least $1 billion in assets as of January 1, 2026.
The proposed measure, filed with the California Attorney General’s office, would broadly define wealth to include both tangible and intangible assets such as stocks, business interests and other investments, which would capture unrealized gains on shares even if they have not been sold. Revenue from the tax, projected at tens of billions of dollars, would be directed primarily to health care and other public services.
Gov. Gavin Newsom, D-Calif., who has been flirting with a national-level campaign, recently said he is adamantly against the idea of a wealth tax.
"I want to be a big tent party," he said.
Paying their "Fair Share"
Supporters argue the tax is necessary to address looming budget shortfalls, particularly anticipated reductions to Medicaid funding, and to ensure that the wealthy pay their “fair share.” Advocates argue California’s wealthy have reaped outsized benefits from the state’s business environment and infrastructure while contributing less in proportion to their economic success.
The proposed tax, however, has been greeted with sharp opposition from business groups, tax lawyers and some economists, who warn it could dampen investment, create administrative complexities, and encourage wealthy residents and corporations to relocate out of state. The California Chamber of Commerce has cautioned that including unrealized gains in the tax base would be unprecedented and could hurt the state’s technology and innovation sectors.
Forbes reported that in 2021, California Governor Gavin Newsom, then facing a recall election, has drawn far more support from billionaire donors than any of his opponents — by a compelling margin. Just the News was unable to determine whether any of these donations were returned.
Polling Shows Weak Support for Taxing Unrealized Gains
Proposals to tax wealth while gains are still on paper have also surfaced in federal policy discussions. In the Biden-Harris administration’s 2025 budget blueprint, a proposal to impose a minimum tax — including on unrealized capital gains — for households with more than $100 million in net wealth drew vocal criticism from business leaders and some lawmakers, as noted by the Tax Foundation.
A Napolitan News survey conducted by Scott Rasmussen in October 2024 ahead of the presidential election found that only 14% of surveyed voters favor a policy that would tax unrealized capital gains each year.
A larger number of those surveyed, 25%, argue that gains from stock should never be taxed.
Analysts note that many voters view taxing gains before assets are sold as unfair or impractical, particularly for small investors who might not have the cash on hand to cover annual tax bills on paper gains.
Billionaires talking about leaving California
Some of California’s wealthiest residents are contemplating whether to remain in the state if such a tax on unrealized gains is put into place. According to reporting by The New York Times, several high-net-worth individuals, including technology investors and founders, are closely monitoring the proposal and exploring relocation options to states with lower tax burdens.
Tech billionaire Peter Thiel has already moved his primary residence out of California to Miami. He has cited wealth-tax proposals as part of a broader concern among the Silicon Valley business community, the report said, citing sources.
Other investors and executives such as Larry Page have privately expressed similar concerns, warning that even a few billionaire departures could significantly reduce state revenue due to California’s heavy reliance on taxes paid by top earners, according to the report.
Rep. Ro Khanna, D-Calif., whose district covers Silicon Valley, responded to the NYT report on X, sarcastically saying he will miss Thiel and Page.
“Peter Thiel is leaving California if we pass a 1% tax on billionaires for 5 years to pay for healthcare for the working class facing steep Medicaid cuts,” he wrote. “I echo what FDR said with sarcasm of economic royalists when they threatened to leave, ‘I will miss them very much.’”
Campaign watchdog OpenSecrets.com has shown that Khanna has been the beneficiary of campaign donations from high-tech corporations adding up to at least $787,962 in the most recent reporting cycle.
Nicholas Ballasy
Source: https://justthenews.com/nation/states/wealth-tax-proposed-calif-despite-polling-showing-its-unpopular-billionaires-ready
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