Ballot measure would tax California billionaires 5% once

CALIFORNIA — A proposed statewide ballot initiative would create a one‑time tax on California billionaires and direct most of the revenue toward health care, according to an analysis by the Legislative Analyst’s Office (LAO).

The LAO reports that California is home to a few hundred people with wealth over $1 billion, often called billionaires.

Under the proposal, anyone classified as a billionaire and living in California on January 1, 2026, would pay a one-time 5% state tax on net worth, due in 2027.

There would be an option for taxpayers to spread payments over five years, though doing so would increase the total amount paid.

Real estate, pensions, and retirement accounts would be excluded from the tax.

90% of the revenue must be spent on health care services

The LAO explains that wealth is different from income, which is the amount earned over a set period, such as one year. A person’s wealth typically is measured by their net worth.

A person’s net worth is the value of all the things they own, like stocks, businesses, or other investments, minus their debts.

“Many of these billionaires gained their wealth as executives or investors in California technology companies,” according to the analyst.

The wealth tax could generate tens of billions in state revenue.

The LAO analysis notes that 90% of the revenue must be spent on health care services, while the remainder would be available for administrative costs, education, and food assistance.

Wealth tax revenues would be placed in a special account.

Possibility that some billionaires will leave the state

While the measure could provide a large, short‑term boost to state revenues, the LAO analysis warns that it could also have longer‑term fiscal impacts.

There is a possibility that some billionaires may choose to leave California to avoid the tax. This could reduce ongoing state income tax revenues by hundreds of millions of dollars annually.

“This would mean less money for the state’s general budget that supports education, health care, prisons, and other services. While there would be money from the wealth tax to pay for some of these things, like health care, that money would be temporary,” according to the report.

The state would also face tens of millions in administrative costs to assess and collect the wealth tax.