Proposed ‘billionaire tax’ in California is seeing enormous donations against it, the biggest of which comes from Google co-founder

California is currently moving toward a potential showdown at the ballot box this November regarding a proposed one-time 5% tax on the wealth of billionaires. The initiative, which has been spearheaded by the healthcare workers union SEIU-UHW, aims to address significant funding shortfalls within the state’s healthcare sector.

This proposal has sparked an intense financial and political battle, with massive amounts of capital flowing into campaigns to either support or block the measure. The stakes are incredibly high, as the outcome could influence future policy discussions at the federal level regarding wealth taxation.

The push for this tax originated as a direct response to deep cuts in healthcare funding that followed the passage of President Donald Trump’s “Big Beautiful Bill.” According to the California Budget and Policy Center, these federal cuts could result in the state losing as much as $30 billion in Medicaid funding annually, potentially leaving 3.4 million people without coverage.

This seems like a class war being played out in real time, albeit through funding and bills

Suzanne Jimenez, who serves as the chief of staff at SEIU-UHW and helped architect the measure, has been vocal about the potential consequences of inaction. She warned of a “complete collapse” of the healthcare system in California if these funding gaps are not addressed. The union and its associated groups have already contributed more than $31 million to a committee called the Save California Healthcare and Public Education Committee to help push the initiative forward.

On the other side of this debate, the opposition has proven to be extremely well-resourced. A group known as Building a Better California has raised over $118 million from 10 donors to fight the measure. Notably, more than half of that funding has come from Google co-founder Sergey Brin.

The strategy employed by this group is particularly interesting because it involves backing two competing ballot initiatives. One of these initiatives focuses on government transparency, while the other is designed to protect retirement savings from taxes. If either of these competing measures receives more votes than the billionaire tax, the billionaire tax would be effectively negated.

While the opposition to the billionaire tax is widely discussed, representatives from Building a Better California and the campaigns they support have been tight-lipped about the measure itself. A spokesperson for the group promoting the retirement savings initiative told ABC News, “We are solely focused on passing our measure.”

Shana Kushner Gadarian, a professor at Syracuse University who studies political psychology, believes this is a calculated political maneuver. She suggested that the strategy is designed to avoid the controversy of the billionaire tax entirely by positioning the initiatives as being for something rather than against something. “My guess would be that the strategy is to just avoid the whole question of the billionaire tax … to be for something rather than against something,” Gadarian told ABC News.

The economic arguments surrounding this proposal are just as polarized as the political ones. Brian Brokaw, a longtime adviser to California Gov. Gavin Newsom and the leader of the group Stop the Squeeze, argues that the tax could be devastating for the state. He told ABC News, “We’re not just talking about individual billionaires. You’re talking about an entire economy that is the backbone of California’s economic engine.”

The state’s nonpartisan Legislative Analyst’s Office has also released a report noting that it is difficult to predict the exact revenue the tax would generate. Furthermore, the report states, “It is likely that some billionaires decide to leave California,” and that the resulting reduction in state revenue could reach hundreds of millions of dollars annually.

However, not everyone agrees that these economic threats will materialize. A report from the University of Missouri School of Law suggests that the threats made by wealthy individuals to relocate if the tax passes may simply be strategic posturing. Jimenez echoed this sentiment, stating, “I think it’s kind of the same scare tactic we see time and time again around any kind of campaign that is about investing in public services.”

The political landscape in California remains deeply divided on the issue. During a debate on May 5, almost every candidate running for California governor voiced their opposition to the tax. The only exception was Tom Steyer, who stated that the tax “doesn’t go far enough,” while simultaneously noting his desire for California to remain a place where companies that are changing the world are begun and grow and stay. Meanwhile, Gov. Newsom has remained firmly opposed to the tax.

Regardless of whether the measure passes, the conversation itself is shifting the national discourse. California’s Rep. Ro Khanna and Vermont Sen. Bernie Sanders have already introduced federal legislation that would establish an annual 5% wealth tax on billionaires across the country. As Gadarian noted, “Even if you don’t win this time, now people are at least talking about the possibility of a billionaire tax,” adding, “That seems pretty strategic to me.”

With approximately 250 billionaires slated to be impacted by the California proposal, the coming months will likely see even more money poured into the battle, making this one of the most closely watched ballot measures in the state.