‘An economic 9/11’: A proposed one-time tax on California billionaires is driving Big Tech nuts
A proposed tax on California billionaires has dropped like a bomb on state politics, splitting the Democratic party and galvanizing the state’s Big Tech executives in opposition.
The initiative hasn’t formally qualified for the ballot yet, but backers have gotten more than 1.5 million signatures in support of it, nearly double the required 875,000.
The threat of the tax has been enough to inspire backroom arguments, group chat strategy sessions, sudden interstate moves, a pro-billionaire march through San Francisco, millions of dollars in political spending, and apocalyptic warnings from California’s tech exec class, who make up some of the tax’s main targets.
One AI entrepreneur declared the tax would be an “economic 9/11” on the state and its tech industry.
The debate, more than just a tax policy fight, is a referendum on the present state of opinion around wealth, taxes, and tech in California. These issues will help define a series of generational elections in 2026 and 2028, in which Nancy Pelosi’s congressional seat, the California governor’s mansion, and the White House will all be up for grabs.
The California Billionaire Tax Act, if it qualifies this summer for the 2026 ballot, would ask voters to approve a one-time, five percent tax on California residents worth more than $1.1 billion. There are roughly 200 billionaires overall in the state, according to estimates.
The funds raised would largely be spent on healthcare. The SEIU-UHW healthcare union, which is leading the campaign for the measure, describes the tax as a vital, last-ditch effort to make up the roughly $100 billion in health and social spending cuts the union estimates will hit California in the next five years as a result of the One Big Beautiful Bill, the Trump administration’s signature spending package, which passed in 2025.
Kris Cuaresma-Primm, head of partnerships for the pro-tax coalition, compared the funding hit to a Covid-level crisis for the state, one that could cost about 200,000 jobs across multiple sectors and put more than 80 hospitals at risk of closure or service cuts.
“When you rip $100 billion out of a state’s healthcare system, key parts of it will collapse,” he told The Independent.
The designers of the measure say taxing the state’s billionaires comes out of a sense of fairness. Billionaires tend to have lower tax rates compared to their overall economic income than the average American, and top tech executives hold much of their fortunes in stocks, which aren’t taxed at all until they are sold or pay dividends.
“Our view was that billionaires are not going to miss the money,” according to Professor Brian Galle of U.C. Berkeley law school.
He noted that many of the state’s billionaires — including the tech executives who donated to Trump and got “really good seats at the inauguration” — have done fabulously well under this administration. Billionaire wealth in the state has increased by more than 150 percent since 2023, Galle and his colleagues have estimated.
California-based tech billionaires like Meta’s Mark Zuckerberg have further benefitted from a buoyant stock market and Trump’s OBBB tax cuts, which disproportionately favor the ultra-wealthy.
“They could pay the five percent wealth tax and still be richer than they were in January,” Galle said of this year’s resilient stock market.
