California Unions Push for Billionaire Tax to Fund Health Care

Labor and health care organizations in California are mobilizing to place a measure on the 2026 ballot that would impose a one-time 5% tax on the wealth of approximately 200 billionaires in the state. This initiative aims to raise around $100 billion to bolster funding for health care and education, responding to deep federal cuts in social services.

The proposal is championed by the Service Employees International Union (SEIU) and St. John’s Community Health in Los Angeles. According to Dave Regan, president of SEIU-UHW, the ballot initiative represents the “only solution anyone can see” to prevent a collapse of the state’s health care system. Regan expressed urgent concerns, stating, “This will help us keep health care facilities open, stabilize premiums and coverage for all Californians, protect health care jobs, and also improve public education.”

The proposed tax would target the 2025 net worth of billionaires residing in California, allowing them to pay off the obligation over five years. The revenue generated would be allocated to a special fund, with 90% designated for health care spending and 10% for K-12 education funding. To qualify for the ballot, the initiative needs to gather 874,641 signatures, a goal that supporters believe is achievable.

Despite the enthusiasm among proponents, gaining voter approval for the tax may prove challenging. The tax targets net worth rather than income, encompassing all assets, including investments, property, and valuables. This distinction has raised concerns among some groups, particularly regarding potential long-term implications for California’s economy.

Susan Shelley, vice president of communications for the Howard Jarvis Taxpayers Association, highlighted that while many Californians might assume the tax would not impact them, establishing a wealth tax could set a troubling precedent. “We tax income at a very high level, but we don’t tax wealth and assets,” Shelley noted. She warned that over time, such a tax could extend to the middle class, suggesting that homeowners could be targeted based on their equity.

In contrast, proponents argue that the tax is specifically designed to target the ultra-wealthy and would not impact the middle class or businesses. Economist Emmanuel Saez from the University of California, Berkeley, emphasized that the structure of the tax ensures billionaires cannot evade their obligations simply by relocating their assets. “California billionaires are not going to be able to avoid the tax by moving their assets outside of California,” Saez stated.

The initiative emerges amid a backdrop of budgetary strain in California, where lawmakers have grappled with significant cuts to social services due to federal changes. The state’s Medicaid agency has estimated that 3.4 million people could lose coverage due to these adjustments, with the most substantial cuts expected to take effect in 2027.

While some Democratic lawmakers have considered alternative revenue measures to support social services, they have shifted focus in recent discussions. Regan has confirmed that there are currently no plans to negotiate with state lawmakers, maintaining the push for the initiative to go before voters.

As California faces critical challenges in funding essential services, the outcome of this proposed billionaire tax could have significant implications for both health care and education in the state. The success of the initiative will depend on how effectively its supporters can communicate its potential benefits to the broader public and address concerns regarding its implications for the state’s economy.