A controversial proposal in California to issue a wealth tax on billionaires has gained enough signatures to qualify for the ballot in November, state officials announced on Wednesday.
- +California ‘billionaire tax’ makes ballot despite opposition from tech moguls
The news is set to intensify an already heated debate around the tax, which has pitted tech moguls and the state’s governor, Gavin Newsom, against the labor unions backing the measure.
The news is set to intensify an already heated debate around the tax, which has pitted tech moguls and the state’s governor, Gavin Newsom, against the labor unions backing the measure.
The California Billionaire Tax Act, colloquially known as the billionaire tax, would levy a one-time 5% tax on any California resident worth more than $1bn. The proposal is backed by the Service Employees International Union-United Healthcare Workers West as a means of funding California’s strained healthcare and education programs.
The proposal has become one of the state’s biggest political flashpoints as it gained momentum throughout the year, with prominent billionaires, such as Google co-founder Larry Page, making moves to cut ties with the state and Newsom vowing to block it from going to a vote. Although it has gained enough signatures for the ballot, the groups backing the measure have until 25 June to decide whether to move forward or potentially strike a deal with the state.
While unions backing the group have framed the proposal as a way of getting the ultra-rich to pay their fair share, many of the state’s tech elites have condemned the tax and spent millions attempting to crush it. Google co-founder Sergey Brin has spent $82m alone on efforts to fight the tax, while joining other Silicon Valley billionaires in declaring he will leave California if it goes through.
Palantir co-founder Peter Thiel, crypto billionaire Chris Larsen and Ring founder James Siminoff are among the other tech moguls who have made huge political donations to groups opposing the tax. California has the most billionaires out of any state, many of whom have increased their wealth in recent years amid the AI boom.
Newsom has previously denounced the proposal and claimed that it would drive away businesses. He told The New York Times earlier this year that he would “do what I have to do to protect the state”.
Despite the intense and expensive lobbying against the tax, however, the proposal successfully reached above the 874,641 signatures to make the ballot.
