A major healthcare union is proposing that billionaires living in California be subject to a special tax to compensate for massive cuts resulting from the federal budget law passed under the leadership of US President Donald Trump.
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Leaders of the Service Employees International Union — United Health Care Workers West (SEIU-UHW) recently began collecting the nearly 900,000 signatures required to put the proposal to a referendum in November during the midterm elections and say they are confident they will achieve their goals.
Renee Saldana, a spokesperson for the union, indicated Wednesday that the referendum route had been chosen to achieve the adoption of the tax in question as quickly as possible.
“We do not have time to wait for legislators to decide to act (…) There is urgency because the shortfall caused by the cuts is massive,” she said.
The HR1 budget law—referred to as the “Big Beautiful Bill” by the American president—included significant tax cuts for the better off and in return provided for cuts in medical coverage for millions of Americans as well as a reduction in food support for the most disadvantaged.
“As billionaires are those who have benefited the most from tax cuts, it simply seems fair to us to ask that they come to the aid of the community,” explains Mme Saldana.
The proposal provides that any billionaire domiciled in California as of January 1er January 2026 would have to pay the equivalent of 5% of his wealth in taxes to the State and would give him the possibility of spreading the payment over five years. The puncture would only apply once.
Economists commissioned by the SEIU-UHW, which has 120,000 members, calculated that the measure should make it possible to raise nearly 100 billion US dollars from the 200 billionaires in the state. The total reflects the magnitude of cuts expected over five years due to federal restrictions on the Medi-Cal program, which provides health coverage to 15 million disadvantaged Californians.
The income estimate takes into account the efforts that could be made by the targeted billionaires to attempt to improperly minimize the value of their assets and reduce the resulting bill.
Mme Saldana notes that the cuts resulting from the federal budget law are in addition to those already planned by the California government and have already resulted in numerous layoffs of health sector employees and the closure of establishments.
Several billionaires potentially affected by the special tax show little sensitivity to the arguments of the SEIU-UHW and threaten to move to another state.
One of the co-founders of the Palantir firm, Peter Thiel, whose fortune is estimated at US 26 billion, said he had residential ties to Florida and could challenge a possible drain on this basis.
He also announced that he would pay three million dollars to a group of lobbyists who intend to campaign against the union proposal before the vote is held in November.
Other wealthy Silicon Valley entrepreneurs, including Google co-founders Larry Page and Sergey Brin, are also reportedly moving out of the state in anticipation of the proposal’s passage, according to the New York Times.
On a different note, the CEO of microprocessor maker Nvidia, Jensen Huang, told Bloomberg that he was “perfectly comfortable” with the idea of paying a special tax on his estimated US$159 billion fortune.
The collective fortune of California billionaires increased from US$300 billion in 2011 to US$700 billion in 2019 before reaching US$2.19 trillion in 2025, according to a group of researchers from California and Missouri who analyzed the proposal under study.
They believe that an exodus in response to the special tax would be unlikely since billionaires would gain nothing from leaving due to the retroactive date of 1er January 2026 proposed and the fact that the tax would only apply once.
Researchers also contest the idea that the measure could harm entrepreneurship and the competitiveness of the State, noting that only people who have already accumulated a fortune of more than a billion US dollars would be affected by the drain.
Democratic Gov. Gavin Newsom is opposed to the proposal and vows to campaign to defeat it if it goes to a referendum.
The politician says he is convinced that a special tax on the “super rich” would harm innovation in the state and end up negatively affecting the population by curbing economic activity. However, he will not be able to prevent it from coming into force if it receives the approval of the population.
The SEIU-UHW initiative, which says it was inspired by a wealth tax implemented in Switzerland, is arousing enthusiasm well beyond California, notes Mme Saldana.
“We receive support from across the country. People are worried about their access to health care and are looking for solutions,” she says.
