California Billionaire Tax Proposal Faces Growing Opposition

Governor Newsom and union concerns raise doubts about the potential wealth tax measure.

Published on Feb. 7, 2026

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A proposed one-time 5% tax on California billionaires is facing significant headwinds, with Governor Gavin Newsom voicing strong opposition and concerns growing over potential economic fallout. The tax, spearheaded by the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), aims to generate revenue but is facing criticism from both sides of the political spectrum.

Why it matters

The debate over the wealth tax highlights the ongoing tension between the desire for increased revenue and concerns about the potential economic consequences of taxing wealth. As other states and cities grapple with similar proposals, the outcome of the California measure could set an important precedent.

The details

Governor Newsom has publicly stated his concerns that the tax, slated for 2027, would ultimately harm the state's long-term financial health. He argues that while California already has a progressive tax structure, this particular measure could lead to a reduction in funding for essential services like education, firefighting, and law enforcement. The governor's opposition stems from data provided by the Legislative Analysts Office, which suggests the tax would provide a short-term revenue boost followed by a decline as wealthy residents potentially relocate to avoid the levy.

  • The proposed tax would apply to California residents with a net worth exceeding $1 billion as of January 1, 2026.
  • The tax would allow taxpayers to spread payments over five years with additional costs.

The players

Gavin Newsom

The Governor of California who has voiced strong opposition to the proposed wealth tax.

SEIU-UHW

The Service Employees International Union-United Healthcare Workers West, the union that is spearheading the proposed wealth tax measure.

Trevor Foreman

An SEIU member and hospital security officer in Sacramento who defends the tax as a matter of fairness.

Zohran Mamdani

The Mayor of New York City who has proposed a wealth tax to address a budget gap.

Elizabeth Warren

A prominent progressive Democratic senator who has endorsed national wealth tax proposals.

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What they’re saying

“California has the most progressive tax structure in the United States of America. That said, I fear the way this has been drafted... It will reduce investments in education. It will reduce investment in teachers and librarians, childcare. It will reduce investments in firefighting and police.”

— Gavin Newsom, Governor of California (Bloomberg News)

“The tax is a matter of fairness.”

— Trevor Foreman, SEIU member and hospital security officer (N/A)

What’s next

The outcome of the California proposal remains uncertain as supporters gather signatures to qualify for the November ballot. Governor Newsom's vocal opposition, however, signals a formidable challenge for the union-backed initiative.

The takeaway

The debate over the wealth tax in California highlights the ongoing tension between the desire for increased revenue and concerns about the potential economic consequences of taxing wealth. As other states and cities consider similar proposals, the outcome of this measure could set an important precedent.