SEIU Collects Signatures for California Wealth Tax to Take %5 of Billionaires Assets for Healthcare

The proposed California billionaires tax, formally known as the 2026 Billionaire Tax Act, is a ballot initiative sponsored by the Service Employees International Union-United Healthcare Workers West (SEIU-UHW) and health care groups. It aims to impose a one-time 5% tax on the net worth of California residents (individuals or certain trusts) exceeding $1 billion as of January 1, 2026.

Key Details of the ProposalScope - It would apply to roughly 200 billionaires living in California, whose collective wealth exceeds $2 trillion. Exclusions include real estate, pensions, retirement accounts, and certain tangible personal property located outside the state.

Payment - Taxpayers could pay the full amount in 2027 or spread it over five years (with added interest or fees).

Revenue Use - Estimated to raise around $100 billion, with 90% allocated to health care (e.g., offsetting federal funding cuts to Medi-Cal) and 10% to education and food assistance.

Status - As of late 2025, the initiative is in the signature-gathering phase; it needs about 875,000 valid signatures to qualify for the November 2026 ballot. If it qualifies and passes with a simple majority, it would take effect retroactively based on 2026 residency.

Controversy and ReactionsThe proposal has sparked significant backlash, with critics (including tech founders like Palmer Luckey, Garry Tan, and investors like Bill Ackman) warning it could drive an exodus of wealthy residents and harm innovation. Some billionaires, such as Peter Thiel and Larry Page, are reportedly considering reducing ties to California before the end of 2025 to avoid residency on the key date. Governor Gavin Newsom has opposed it, calling for pragmatism to retain high earners.Proponents argue it addresses wealth inequality (noting billionaires often pay lower effective rates than average taxpayers due to unrealized gains) and funds critical services amid federal cuts.

Is It Aimed at Elon Musk?

No, the proposal is not specifically aimed at Elon Musk. It targets all California-resident billionaires broadly, regardless of identity. Musk moved his primary residence from California to Texas in 2020 (citing high taxes and regulations among other reasons), and he has publicly confirmed he no longer lives in California. Since the tax applies based on residency as of January 1, 2026, Musk would not be subject to it unless he re-establishes residency there.

Past California wealth tax ideas (e.g., a 2023 legislative proposal with partial-year rules) were sometimes nicknamed an "Elon Musk provision" because they could have affected recent movers like him, but this current ballot initiative does not include such exit-tax features-it is strictly residency-based on the snapshot date.

Musk has commented indirectly on wealth taxes (criticizing them as punishing "makers" and noting his wealth is tied to productive companies like Tesla and SpaceX), and his lawyer Alex Spiro has represented clients opposing similar ideas, but the 2026 act itself is a general measure driven by health care funding needs, not targeted at any individual.