Proponents have filed a California ballot initiative proposing a one-time wealth tax on individuals with more than $1 billion in net worth. The “2026 Billionaire Tax Act” would impose, for tax year 2026, a 5% tax on “all forms of personal property and wealth, whether tangible or intangible” exceeding $1.1 billion, with a slightly lower rate on amounts between $1-$1.1 billion. California residents, part-year residents, and certain trusts would be subject to the tax. The initiative would also impose penalties ranging from 20-40% for understatements of the tax.
To qualify for the November 2026 ballot, the initiative must garner at least 874,641 voter signatures, and, if qualified, would only require a simple majority vote to pass.
The measure aims to address an “emergency situation” stemming from an anticipated $30 billion annual shortfall in state healthcare funding. However, given the complexities of implementing a new tax and the likelihood of legal challenges, the state may not realize revenue from the measure anytime soon. To that end, the initiative allocates up to $15 million annually for the “actual and necessary costs” of enforcement. By comparison, the Franchise Tax Board previously estimated it would require $200-$300 million per year, excluding startup costs, to administer a 2022 proposal for an annual 1.5% billionaire wealth tax.
Not surprisingly, the initiative could drive some high net-worth residents to leave California, potentially worsening the state’s budget challenges in the long term. Between this impact to high net-worth residents and the administration difficulties of administering a wealth tax, similar measures have failed in the past.
While the “2026 Billionaire Tax Act” is still far from becoming law, it underscores California’s ongoing debate over how to address fiscal issues and highlights the complexities of taxing net wealth.
California Office of the Attorney General, Initiative 25-0024, “2026 Billionaire Tax Act” (Submitted for Title and Summary Oct. 22, 2026).
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