Backers of California's proposed billionaire tax initiative, the Billionaire Tax Now Coalition, have offered to reduce the levy from 5% to 2% if Governor Gavin Newsom agrees to support the measure. This offer was made in an open letter to the governor on Thursday, after the original 5% proposal officially qualified for California's November ballot this week. The coalition, sponsored by the Service Employees International Union-United Healthcare Workers West, argues that the one-time tax is a temporary solution to a looming healthcare crisis.
Initially, the initiative aimed to impose a one-time 5% tax on California residents with a net worth exceeding $1 billion, as of January 1, 2026. This original proposal was estimated to generate $100 billion from approximately 200 billionaires, with 90% allocated to healthcare and the remainder to education and food assistance programs. The need for the tax reportedly stems from federal healthcare funding cuts outlined in the "One Big Beautiful Bill Act," which could cost California around $30 billion annually and impact the 14 million Californians relying on Medi-Cal.
The coalition stated that a reduced 2% levy would act as a two-year bridge, preventing 150,000 healthcare job losses, avoiding hospital and clinic closures, and preserving coverage for 3.2 million Californians. They warned that failure to act could lead to over 20 million residents facing higher premiums, deductibles, and co-pays. However, Governor Newsom has historically opposed tax increases, fearing they could prompt wealthy residents and businesses to leave the state.
