California’s ‘Billionaire Tax’ Could Reach Far Beyond Billionaires

Last week, the Service Employees International Union (SEIU) announced it had gathered more than 1.5 million signatures — nearly double what it needed — to put a sweeping new wealth tax on California’s November ballot. The initiative is called the 2026 Billionaire Tax Act.

The name is designed to make you stop reading. Don’t.

SEIU has spent months positioning itself as the champion of nurses, teachers and caregivers. What it has actually done is run a $24 million campaign to put a measure on the ballot that could eventually be used to tax virtually any Californian who owns assets — with no return trip to the ballot box required.

The measure would impose a 5 percent tax on the total net worth of California residents worth more than $1 billion as of Jan. 1, 2026. Buried in the fine print is a provision allowing the California legislature to expand the tax — lowering the threshold, adding asset categories — by simple majority vote, without voter approval.

The Tax Foundation has warned that the measure’s design could push the effective rate on some taxpayers well above the advertised 5 percent.

SEIU leaders will tell you pensions and retirement accounts are excluded. That’s true … for now. What the union won’t tell you is what happens to those pension funds when California’s investment climate deteriorates.

CalPERS — the pension system for California public employees — manages roughly $556 billion in assets and is already facing more than $179 billion in unfunded liabilities.

CalSTRS, the pension fund for California’s teachers, manages a portfolio of more than $400 billion. Both depend on a functioning private economy and stable financial markets.

When founders and investors are forced to sell equity stakes to pay a tax bill, and when the state’s wealthiest residents continue to leave, the damage doesn’t stop with them.

It reaches the pension checks of the workers the SEIU claims to speak for.

The Hoover Institution estimates the permanent loss of income tax revenue from departing residents will leave California worse off — not better off — by $25 billion.

Nearly 30 percent of the billionaire tax base had already left the state before the initiative even qualified for the ballot. Six billionaires departed publicly before the Jan. 1 residency deadline, including Google co-founders Larry Page and Sergey Brin.

More have reportedly followed without any fanfare.

Every departure costs the state years of income tax revenue, capital gains and related economic activity California can’t afford to lose.

SEIU and its enablers call this a healthcare funding measure — a response to federal Medicaid reforms. It isn’t.

California already has the highest income tax rates in the nation. Its budget problems aren’t a revenue problem. They’re a spending problem that’s outpaced even California’s substantial tax base for years.

SEIU claims to speak for hundreds of thousands of workers whose retirement security runs through CalPERS, CalSTRS and a California economy that keeps generating jobs and investment.

A measure that accelerates capital flight and weakens pension fund returns, then hands Sacramento the tools to expand asset taxation without a vote is not a benefit to those workers.

California voters should read past the name of this initiative before they decide whether to support it. The SEIU is counting on them not to.

Aaron Withe is the CEO of the Freedom Foundation, a nonprofit organization dedicated to protecting workers’ rights and advancing employee freedom across America.