California has long been called the state that previews where America goes next. Stricter car emissions standards started in California in the 1960s and eventually shaped what every American can buy on a dealer lot. The push for a $15 minimum wage that began in California in 2016 became national Democratic policy within a few years. Things start in Sacramento and migrate east.
If that pattern holds, America is about to experience the biggest change in how we tax citizens in over a century, since the federal income tax was introduced. This won’t be a tax on what you earn or spend, but a tax on what you own. I’m talking about a wealth tax, and I think it’s important for every citizen, even if you aren’t in California, to be ready for what comes next.
A short history lesson
When the federal income tax was ratified in 1913, it was sold as a way to “soak the rich.” The top rate was 7%. It applied only to incomes over $3,000, and after exemptions, less than 1% of Americans actually paid it. Most never filed.
Then came the expansions. The Revenue Acts of 1916 and 1917 pushed the top bracket from 7% to 67% to fund WWI. The 1942 Revenue Act turned the income tax into a mass tax: filers went from about 7 million to 42 million in a few years, and the IRS started withholding from paychecks. The “soak the rich” tax became a mass tax, and it never went back.
Why a Wealth Tax now? The federal Medicaid cuts
There’s a specific political moment driving this, and it explains how the measure is designed.
In July 2025, Trump signed the One Big Beautiful Bill Act, cutting roughly $1 trillion from Medicaid over the next decade. The bill added work requirements to qualify for coverage and tightened eligibility meaning that the federal Medicaid dollars given to states went down substantially.
California, with its large population, got hit harder than any other state. Per RAND analysis, California’s projected Medicaid reductions total about $112 billion over the decade, the largest dollar-value cut of any state. Up to 3.4 million Californians, roughly 1 in 11 residents, could lose Medi-Cal coverage.
In response to that, the SEIU-United Healthcare Workers West came up with a billionaire tax to remedy this budgetary shortfall.
What’s actually on the ballot
The 2026 Billionaire Tax Act would impose a one-time 5% tax on the net worth of Californians worth $1 billion or more on January 1, 2026, payable in 2027. About 200 people qualify. Ninety percent of the revenue goes to state-funded healthcare, with the rest split between education, food assistance, and administration.
SEIU submitted 1.55 million signatures on April 27, nearly double the required 874,641. The Secretary of State has until June 25 to certify, but unless there is massive errors in the signatures gathered, this measure is going to voters.
It could actually pass
The top-line polls are favorable. UC Berkeley’s Institute of Governmental Studies has the measure at 52% Yes, 33% No. Democrats support it 72–18. Even no-party-preference voters tilt 51% Yes.
Yet a January 2026 David Binder Research poll with the opposing case included came in at 41/53. But California ballot measures routinely pass with the kind of starting profile this one has.
There will undoubtedly be many more polls, but the main point to take is that this is not a long shot at all.
Can the wealthy just leave? Many already have.
The measure values wealth as of January 1, 2026. Anyone who established residency outside California before that date is off the hook. Anyone trying to move after is caught by the snapshot.
The list of people who got out ahead is filled with some household names.
Sergey Brin (Google co-founder) made a $42M Lake Tahoe mansion on the Nevada side his primary residence and reportedly told Governor Newsom in person at a holiday party. He also moved 15 California LLCs out of state.
Larry Page (Google co-founder) established Florida residency and is building a $173M+ Miami real estate compound.
Mark Zuckerberg is buying a $150–200M estate on Miami’s Indian Creek Island.
Peter Thiel shifted his family investment firm to Miami in December. Larry Ellison made a 16-acre Florida oceanfront property his primary residence. Travis Kalanick completed his move to Austin on December 18.
And Elon Musk is the original CA he left for Texas in 2020, before this tax was on the table.
Per Fortune, only six billionaires formally left ahead of the snapshot date, out of California’s ~214 billionaires. A small fraction by headcount, but those six took an estimated $27 billion in potential tax revenue with them. All told, New York Post reports roughly $1 trillion in net worth has effectively left California in the run-up to the ballot measure, counting both residency changes and entities relocated out of state.
Other countries already tried this
The California measure isn’t a new idea. It’s been tried (and abandoned) by most of the developed world.
In 1990, 12 OECD countries had a national wealth tax, all of them in Europe. Today only three still do: Norway, Spain, and Switzerland. Austria (1994), Germany and Denmark (1997), the Netherlands (2001), Finland, Iceland, and Luxembourg (2006), Sweden (2007), and France (2018) all repealed theirs.
Three reasons keep showing up across the repeals. They didn’t raise much money: European wealth taxes typically collected only about 0.2% of GDP, far less than projections promised. They were administratively painful: Germany’s Constitutional Court struck its wealth tax down in 1997 over unequal asset valuation alone. And they accelerated the departure of the wealthy.
France is the closest precedent. Its Solidarity Tax on Wealth ran from 1982 to 2018. According to the Financial Times, roughly 60,000 millionaires left France between 2000 and 2017. Emmanuel Macron campaigned on repealing the tax and did so within a year of taking office, replacing it with a much narrower tax on real estate only.
California obviously isn’t a country, and leaving for Nevada, Texas or Florida (all with no state income tax) is much easier than leaving France. But the international track record on wealth taxes is unusually consistent: they raise less than expected, cost more to enforce than expected, and push out exactly the people they’re designed to tax.
Will it stay at $1 billion? The $10 million question.
The measure on the ballot targets billionaires. About 200 people. That’s the design.
But the entire point of the income tax story is that thresholds move. Once a tax exists, lowering the threshold is a much smaller political lift than creating it in the first place, as we saw over 100 years ago with the federal income tax.
Here’s where this stops being speculation.
The next version is already being polled. In late March 2026, California voters reported receiving survey questions from a “California Opinions Survey” asking specifically whether they’d favor or oppose a new state wealth tax on net worth over $10 million — 1/100th of the threshold on this November’s ballot. The poll’s sponsor wasn’t disclosed. But tax measures don’t get market-tested for no reason. Someone is preparing to ask this question on a real ballot.
And the measure itself has an expansion mechanism baked in. Section 50310 of the ballot measure text authorizes the California legislature to amend the act without going back to voters, as long as the amendments are “consistent with and furthering the purposes” of the initiative. Critics, including several legal commentators, argue this lets the legislature lower the threshold or add asset categories by a single legislative vote. More cautious analysts note that turning a “one-time tax on billionaires” into something permanent and broader probably exceeds what “consistent with and furthering the purposes” allows, since the constitutional language is explicitly one-time and billionaire-only. The line is unsettled and will be settled in court, not at the ballot box. But it’s worth pointing out that there is a chance that this wealth tax can be lowered to non billionaires without it going back to the voters.
And one of the measure’s co-author has also acknowledged that this wealth tax may not stop with billionaires. Emmanuel Saez, the UC Berkeley economist who authored the proposal, said at a recent debate that the current one-time framing is “an experiment.” When the moderator pointed out that previous California taxes initially deemed temporary, after the Great Recession, ended up being extended, Saez was candid: “If there is another one, I don’t think it’s going to be a one-time tax. You can’t surprise billionaires more than once.….I’m not there to pretend that it’s one, once, and never again. – no wealth tax will ever happen after that one. You can’t commit to that.”
That’s one of the authors of the bill, on the record, telling voters not to take the one-time label literally.
How each side sees it
I want to make sure both arguments land in their strongest form, because too many commentators aren’t completely honest about what each side believes. So this is my best attempt to characterize their arguments:
The left’s view: billionaires already pay shockingly low effective rates, because most of their wealth sits as unrealized gains they never have to sell. People like Mark Zuckerberg famously have a $1/year salary, because all of his money is tied up in Meta stock. He’s not earning his wealth through his income, he’s earning it through his business, which allows him to defer payment on a substantial portion of his wealth. These folks argue California has serious unmet needs in healthcare, housing, education, and homelessness. Asking 200 people for a single year’s payment to fund services for millions is, in their framing, the definition of fair. And making it one-time avoids the recurring valuation headaches that have sunk wealth taxes in other countries.
The right’s view: California already has the highest top income tax rate in the country at 13.3%. And per California’s nonpartisan Legislative Analyst’s Office, the top 1% of California filers already pay roughly 38–50% of all state personal income tax depending on the year: about 45% in 2019, 50% at peak in 2021, 38.7% in 2023. The “rich don’t pay their fair share” mantra we hear so often collides with the reality that California’s revenue is unusually dependent on a small group of high earners.
There’s a second piece of the right’s argument worth pulling out, because it’s a number that doesn’t get cited enough. California’s total state budget went from about $265.9 billion in 2016 to roughly $495.6 billion in 2025–26: an 86% increase. Over the same period, the state’s population was essentially flat: roughly 39.3 million in 2016 vs. 39.35 million in 2025. Even after accounting for inflation, real per-capita state spending is up around 40%.
Which raises a question I think every California voter should ask before they vote: with that much more money flowing through Sacramento, are the schools, the roads, public safety, and the response to homelessness 40% better?
One more thing worth flagging, because it complicates the partisan framing: this isn’t a clean Democrats-vs.-Republicans fight. Governor Gavin Newsom has come out against the measure, arguing it would hurt the state’s economy, and much of the establishment California Democratic infrastructure is opposed alongside him. He’s also likely running for President, so he might want to be seen as more moderate than the state of California in general. At the same time, however, billionaire Democratic gubernatorial candidate Tom Steyer said at a recent debate he’d vote for it — but that “it doesn’t go far enough.”
Three ways this plays out
There are four realistic outcomes from here.
One: it makes the ballot and loses decisively (sub-45%). Democrats read the result as “even California won’t pass this,” and the idea moves to the back burner nationally. Wealth-tax momentum stalls for years or even decades.
Two: it loses narrowly (45%+). I’d categorize this as a moral victory. Supporters argue they almost won it when it was still a pretty novel concept. Democrats run on it in the 2028 presidential primary. The idea expands to other blue states. Expect another version on the California ballot in 2028, and I don’t think it’s crazy to assume they’d put forward a lower threshold. In general, I feel like a a near-miss preserves the political will to try again.
Three: it passes. California becomes the national model. Democrats run on it in 2028, and Washington DC uses it as proof of concept. The conversation moves from whether they do it to how they do it.
That being said, the federal blueprint is already in writing. Senator Elizabeth Warren has reintroduced the Ultra-Millionaire Tax Act: an annual 2% tax above $50 million, plus an extra 1% on billionaires. Crucially, it includes a 40% exit tax on anyone worth over $50M who renounces US citizenship. If scenario 2 or 3 plays out, that’s the model that gets picked up by 2028 Democratic primary candidates: a federal version with a much lower threshold and an exit tax that California can’t impose on its own. Leaving the state is one thing. Leaving the country would get very expensive.