The California billionaire wealth tax initiative is a proposed ballot measure for the November 2026 election that would impose a one-time tax on the net worth of California's wealthiest residents. The initiative, formally known as the 'Tax on Extreme Wealth' measure, seeks to amend the California Constitution to levy a tax of 1.5% on net worth exceeding $1 billion for individuals and couples. This would be a one-time assessment, not an annual tax, and is designed to generate revenue for state programs addressing homelessness, climate resilience, and public education. The proposal represents the most ambitious effort to date to directly tax extreme wealth at the state level, testing both legal boundaries and public sentiment regarding economic inequality. Proponents argue it is a necessary corrective to decades of wealth concentration, while opponents contend it is unconstitutional and would drive economic activity out of California. The initiative is being organized by a coalition of labor unions, progressive advocacy groups, and some Democratic legislators, though it faces significant legal and political hurdles before reaching voters. Interest in this topic stems from its potential to reshape state fiscal policy, set a national precedent for wealth taxation, and directly impact the fortunes of some of the world's wealthiest individuals who reside in California.

Historical Context

California has a long history of using ballot initiatives to enact tax policy, dating back to Proposition 13 in 1978, which limited property tax increases and established a two-thirds legislative vote requirement for tax increases. This created a challenging environment for tax measures, requiring either supermajority legislative approval or direct voter approval via ballot initiative. In 2012, voters passed Proposition 30, a temporary income tax increase on high earners championed by Governor Jerry Brown to fund education, demonstrating that Californians would support targeted taxes on wealthier residents during budget crises. That measure passed with 55.4% of the vote and was extended by Proposition 55 in 2016. However, attempts to go further have faced obstacles. In 2020, Proposition 15 sought to reform commercial property taxes but failed with 48% support, showing limits to tax increase support even in a Democratic-majority state. The current wealth tax proposal builds on this history but represents a more direct approach than previous measures, targeting net worth rather than income or property value. It also follows failed federal wealth tax proposals, including Senator Elizabeth Warren's 2019 plan for a 2% annual tax on wealth over $50 million, indicating a strategic shift to state-level action where progressive policies have found more success recently.

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