California Billionaire Wealth Tax Proposal Raises Questions About Charitable Giving

Experts weigh in on how the proposed tax could impact philanthropy in the state.

Published on Mar. 9, 2026

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A proposed California Billionaire Wealth Tax Act is currently gathering signatures to appear on the November 2026 ballot. The initiative would impose a one-time 5% tax on the wealth of California residents with a net worth of at least $1 billion as of December 31, 2026. Experts discuss how the tax could affect charitable giving, including that it would not allow billionaires to reduce their taxable net worth through donations to nonprofits or donor-advised funds made after the proposal was announced in October 2025.

Why it matters

The California Billionaire Wealth Tax Act raises important questions about how to effectively tax the ultra-wealthy and incentivize them to direct more of their wealth to working charities, rather than warehousing funds in private foundations or donor-advised funds. The outcome of this proposal could set a precedent for similar efforts at the federal level or in other states.

The details

The California Billionaire Wealth Tax Act was drafted in 2021 at the request of the state's attorney general and an assemblyman. It aims to generate around $100 billion in revenue to make up for federal healthcare funding cuts. The tax would apply to the net worth of California residents with at least $1 billion in wealth as of the end of 2026. Experts note that the state-level approach may be more viable than a federal wealth tax, which could face constitutional challenges. The proposal includes provisions to 'hold the nonprofit sector harmless,' meaning donations made before October 2025 would not be retroactively taxed, but gifts after that date would not reduce the billionaire's taxable net worth.

  • The California Billionaire Wealth Tax Act was drafted in 2021.
  • Proponents are currently collecting signatures to put the proposal on the November 2026 ballot.
  • The tax would apply to wealth held as of December 31, 2026.

The players

Brian Galle

Co-author of the California Billionaire Wealth Tax Act and professor at the University of California, Berkeley Law School.

Rob Bonta

California's current attorney general, who requested the initial proposals that led to the California Billionaire Wealth Tax Act.

Alex Lee

California assemblyman who also requested the initial proposals that led to the California Billionaire Wealth Tax Act.

Sergey Brin

Billionaire co-founder of Google, who is funding ballot measures that could nullify the California Billionaire Wealth Tax Act.

Eric Schmidt

Billionaire former CEO of Google, who is also funding ballot measures that could nullify the California Billionaire Wealth Tax Act.

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What they’re saying

“The key rule is that although existing tax-exempt trusts and other entities aren't subject to the wealth tax, any gratuitous transfer that happens after the text of the proposed initiative became public in October doesn't reduce the transferrer's net wealth.”

— Brian Galle, Co-author of the California Billionaire Wealth Tax Act (Inside Philanthropy)

“Nothing the billionaires do now should be able to change the tax owed if the California initiative passes. Since there is no additional tax incentive for giving, I would expect billionaires' giving not to be affected much this year.”

— Nicolas Duquette, Associate Professor, USC Sol Price School of Public Policy (Inside Philanthropy)

What’s next

The California Billionaire Wealth Tax Act must first gather enough signatures to appear on the November 2026 ballot. If it passes, it would then face potential legal challenges before being implemented.

The takeaway

The California Billionaire Wealth Tax Act highlights the ongoing debate over how to effectively tax the ultra-wealthy and incentivize them to direct more of their wealth to working charities, rather than warehousing funds in private foundations or donor-advised funds. The outcome of this proposal could set an important precedent for similar efforts at the federal level or in other states.