On November 3, 2026, in the U.S. state of California, a referendum will be held aiming to approve a one-time 5% tax on the wealth of billionaires. It is expected to raise $100 billion for the benefit of the state’s health care system.
Ballot Initiatives in the U.S.
Alongside the election of executive or legislative authorities, multiple referendum initiatives are usually considered. These sometimes come from the political system or are presented by individuals who organize specifically around an issue they decide to put before the electorate.
Very often, the results of these popular consultations generate highly significant political processes—sometimes even more relevant than the elections for Congress themselves. Despite this, information about these processes is generally scarce outside the circles of the groups and geographic areas directly involved.
Regarding taxes, according to the Constitution, it is up to each state to decide its own fiscal policy, in addition to federal taxes, a portion of whose collection also goes to the states.
Under this structure, state tax initiatives can be presented without being subject to federal control or review by the U.S. Supreme Court.
California’s Relevance
California is one of the largest and most populous states in the American union. It has nearly 40 million inhabitants and an enormous economic potential.
It is often said that if California were an independent nation, it would be the fifth-largest economy in the world, as it has a gross domestic product of over $3 trillion—that is, about 12% of the U.S. GDP.
Californian billionaires—that is, those whose net worth exceeds one billion dollars, who number just 250—together hold wealth equivalent to 50% of California’s GDP.
Among them are the tech magnates usually located in the area known as Silicon Valley, though they are also found in nearby places like Cupertino or San José.
The fortunes of these companies and their owners have grown spectacularly in recent times: between 2023 and 2025 alone, they increased by more than 100%.
The union proposing the constitutional reform argues that since the 1980s, the wealth of billionaires has grown at an average rate of 7% per year, far exceeding the growth of wages and savings of everyday Californians.
It states that the collective wealth of California’s billionaires went from $300 billion in 2011 to $700 billion in 2019, and to over $2 trillion in 2025.
This enrichment—largely sustained by federal support and questionable because, at the same time, these companies show high levels of indebtedness—has occurred while their tax obligations have decreased due to various decisions made by successive governments.
The “2026 Billionaire Tax Act” Initiative
Against this backdrop, and in the context of multiple reasons for opposition to Washington’s policies—particularly the so-called One Big Beautiful Bill Act, a law passed in July 2025 that essentially left the Medicaid health insurance program for low-income populations without funding—the healthcare workers’ union SEIU-UHW (Service Employees International Union – United Healthcare Workers West) decided to take action.
This union, which has more than 120,000 members, represents healthcare workers in hospitals, clinics, and home care throughout California. It seeks to improve wages and labor rights, but also promotes accessibility and better quality of healthcare.
The SEIU California State Council coordinates the positions of local SEIU unions on issues affecting more than 700,000 workers in California. Its mission is to increase economic equity for workers, guarantee high-quality services, and create a prosperous, fair, equitable, and well-funded California.
SEIU-UHW is affiliated with the International Federation of Service Employees, which has two million members and is the fastest-growing union in North America.
In November 2025, the union submitted to Attorney General Rob Bonta Initiative No. 25-0024, the “2026 Billionaire Tax Act,” requesting that it be named as such.
The document is an extensive text of over 32 pages, very detailed and well-founded, on the political, legal, and social scope of the proposal, including details of its effective implementation.
A central concern of the proponents has been to demonstrate the legality of the initiative—that is, to ensure it is not questionable due to a possible departure from constitutional norms.
In that sense, they consider it relevant to state that the U.S. Supreme Court has validated tax rules with retroactive effect as early as 2026, or even further back, for over a hundred years, since the enactment of the federal income tax in 1913, which had retroactive impact. In California, other tax measures have been approved with retroactive effects.
Furthermore, they assert that if, for any reason, the billionaire tax were challenged in court, they would have to continue paying the tax while the matter is pending before the courts.
By mid-July 2026, nearly 1.5 million signatures had been gathered supporting the initiative, which is roughly double the number required for it to be submitted to popular consideration on November 3rd.
Contents of the Proposal
The text of the proposal states that the purpose of the initiative is to protect access to equitable, high-quality healthcare, as well as to support funding for public education from kindergarten onward and food assistance programs, by raising revenue through a one-time tax on the wealth of billionaires.
By designating billionaire wealth as the source of these critical revenues, the law addresses the fundamental injustice that arises because a large percentage of billionaire wealth is never taxed by the state, given their unique ability to control the timing, location, and amount of the income tax they pay.
The law raises funds for healthcare, education, and food assistance by imposing a narrowly applied one-time tax that is administratively viable and efficient to enforce against all billionaires in the state.
The wealth tax imposed by this law would only moderately curb this explosive growth, as it would collect less than what billionaires typically earn in a single year. Even after paying the tax, California’s billionaires will continue to amass ever-greater fortunes.
California’s billionaires pay much lower tax rates than working families pay out of each paycheck.
And soon, massive federal cuts to healthcare funding will collapse key parts of California’s healthcare system. Local hospitals and emergency services will close their doors forever because billionaires insist on paying less than the rest of us.
The tax applies to billionaires who were residents of California as of January 1, 2026, regardless of how many offices they open or mansions they buy in other states.
The proponents argue that California’s economy is threatened when billionaires pay much lower tax rates than working families pay out of each paycheck, while healthcare costs are skyrocketing, and hospitals and emergency services could close their doors forever—all because billionaires insist on paying less than the rest of the population.
Importance of the Initiative
This initiative is not only relevant in itself, but also as an example for the future, as this tax could be imitated in other states, for example in New York.
In U.S. history, there are already examples of taxes that were first approved at the state level and later became federal decisions.
Such is the case of the progressive income tax, which the federal government made its own in 1913 after it had been in effect at the state level.
In the opposite direction to the 2026 Billionaire Tax Act, in 1978, the same state of California was a pioneer in approving a proposition that limited property taxes—something that, years later, would spread across the entire country.
Currently, the federal and state context in California suggests that the initiative is highly likely to be approved, not only because of its tax fairness but also due to the pressing need to improve the healthcare system—a crucial issue in the American reality today.