(The Center Square) – A union-backed ballot initiative could make its way to California voters that would establish a billionaires’ tax to help fund Medicaid.
According to documents sent to California Attorney General Rob Bonta, the proposed 2026 Billionaire Tax Act would impose a one-time 5% tax on Californians whose wealth exceeds $1 billion.
All forms of personal property and wealth, including capital stock, bonds, artwork, collectibles and investments, could be subject to the tax. For some forms of personal property, like art, collectibles and investments, up to $5 million of value could be excluded from taxation, according to the ballot initiative sent to Bonta’s office.
The tax is meant to help generate enough funds to offset looming federal budget cuts to Medicaid, the federally-funded health coverage known as Medi-Cal in California. Medi-Cal offers no- or low-cost health coverage to low-income individuals in California, according to the Medi-Cal website.
The initiative is being proposed for the 2026 general election, according to the Service Employees International Union – United Healthcare Workers West website. That’s the union backing the initiative.
Signature gathering to put the measure on the ballot is expected to start in the next few months, campaign officials wrote to The Center Square via email on Monday. The initiative will require 546,651 signatures, according to the California Secretary of State’s Office.
According to the California Billionaire Tax Act website, $100 billion in federal money is expected to be cut from California’s health care system over the next five years, which advocates of the billionaires’ tax said would cause many low-income Californians to lose access to health care. The Medicaid cuts are expected to face the big shortfall as part of President Donald Trump’s One Big Beautiful Bill, leading many to fret that insurance premiums will rise and many hospitals, clinics and nursing homes will reduce services or close, the website states.
The website states that about 200 people in California are worth more than $1 billion a year, together holding about $2 trillion in wealth.
The tax makes sense to a former Cabinet member.
“California is facing a manufactured crisis,” said former U.S. Secretary of Labor Robert Reich, in a press release issued by The California Billionaire Tax Act. “These federal cuts didn’t happen by accident — they were designed to shield billionaires from contributing while pushing the consequences onto patients and workers. A time-limited emergency tax on the ultra-wealthy is a practical way to keep the healthcare system functioning.”
While those who are backing the initiative believe this is an effective way to fund Medi-Cal, others have publicly voiced their doubts. Legal challenges could be one way to combat the initiative, one law firm stated on its website.
“If enacted, Initiative 25-0024 likely will invite constitutional challenges on multiple grounds,” wrote lawyers Charles Moll III, Troy Van Dongen and Elle Kaiser in a blog post on the website of the law firm they work for: McDermott, Will & Schute. “For example, imposing a retroactive tax arguably violates California due process protections. Some of these challenges (and others) may be successful, but even if not, high-net-worth individuals and trusts may simply renew their focus on tax planning strategies to mitigate the impact.”
Officials with Service Employees International Union – United Healthcare Workers West did not respond to requests for comment on Monday.
Newsom’s press office and other relevant agencies did not respond to The Center Square’s requests for comment. Legislators on budget, health and elections committees also did not respond.
