California union pushes 5% Billionaire tax to offset federal health care cuts

Sacramento, California – A powerful California union is pushing a bold new ballot measure that would impose a one-time 5% tax on billionaires to offset steep federal cuts to health care for low-income residents.

The proposal, announced Thursday by the Service Employees International Union (SEIU) and a coalition of health care advocates, aims to raise roughly $100 billion from California’s wealthiest residents in tax year 2026. A small share of the money would also go toward public schools, after the federal government threatened to withhold education grants as part of its broader budget cuts.

The measure, which backers hope to place on the November 2026 ballot, would require more than 870,000 valid signatures to qualify. Supporters submitted a request this week to Attorney General Rob Bonta to begin collecting signatures, a crucial first step in the long qualification process.

“This is about protecting people’s lives,” said Dave Regan, president of SEIU-United Healthcare Workers West. “If we do not do this, millions of people are going to lose health care, an untold number of people will go without treatment, and there will be tragedy after tragedy.”

The plan comes in response to federal legislation signed earlier this year by President Donald Trump that slashes more than $1 trillion over a decade from Medicaid and food assistance programs. The California Budget and Policy Center estimates that those cuts could strip $30 billion annually from the state’s Medicaid program, Medi-Cal, leaving up to 3.4 million Californians without coverage.

Governor Gavin Newsom, who has clashed with Trump over the rollback of social programs, said earlier this month that Californians enrolled in the state’s health exchange, Covered California, could see their premiums nearly double next year as a result of the federal cuts.

“California has led the nation in expanding access to affordable health care,” Newsom said. “But Donald Trump is ripping it away.”

Still, Newsom has historically opposed new taxes on the wealthy, including measures that would single out high-income earners or major corporations. His resistance could complicate efforts to build the kind of broad coalition needed to pass a ballot measure of this scale.

The proposed billionaire tax would be levied on the net worth of the state’s richest residents — not their income — and would be collected as a one-time charge. Backers say the money could begin to flow to health care and education programs as early as 2027, helping the state backfill the expected loss of federal dollars.

Emmanuel Saez, an economics professor at the University of California, Berkeley and one of the measure’s advisors, said the initiative is designed to make California’s tax system fairer while protecting vulnerable residents.

“We hope that some, and hopefully a large number, of billionaires will recognize that it’s important in the state where they’ve grown their fortune that they have a responsibility to society,” Saez said. “This isn’t about punishment — it’s about preserving the future of California.”

Whether voters will see it that way remains to be seen. The state’s wealthiest residents — including tech founders and entertainment moguls — are likely to mount an expensive opposition campaign, arguing the measure could drive investment and jobs out of California.

For now, SEIU’s proposal is only an idea on paper. But in a state defined by widening inequality and federal retrenchment, it’s a test of whether California’s populist instincts can translate into policy — and whether its billionaires will be asked to help close the gap.