California Proposes One-Time 5% Wealth Tax for Wealthy Residents

California may impose a one-time 5% tax on the net worth of its richest citizens if a proposed law is successfully passed next year.

This initiative, known as the “2026 millionaire tax law,” aims to offset a projected $30 billion reduction in federal funding for California’s Medicaid program.

Proponents of the bill, including the Service Employees International Union (SEIU), argue that the revenue generated could also bolster the state’s struggling public education system.

Should this legislation go through, prominent tech leaders like Meta’s Mark Zuckerberg and Nvidia’s Jensen Huang might see significant tax liabilities.

For instance, the estimated payout could exceed $8 billion for Huang alone, which corresponds to 5% of his net worth, and for Zuckerberg, it might be around $12 billion or even higher.

Supporters contend that California’s approximately 200 billionaires control around $2 trillion in assets, while the other 19 million taxpayers are burdened with a “much larger portion” of their true income.

Dave Regan, president of SEIU United Healthcare Workers West, emphasized the dire need for this measure, stating that without it, millions risk losing healthcare access, leading to ongoing tragedies.

The California Attorney General’s Office received a request on October 21 to begin gathering signatures for the proposal to appear on the November 2026 ballot.

The bill requires over 870,000 signatures by next spring to qualify for the ballot. It also emerges amidst California’s struggles with population decline as residents relocate to lower-tax areas like Florida and Texas.

Between 2023 and 2024, California experienced the highest outflow of residents compared to any other state, as per Census Bureau data.

The SEIU has not provided a response to inquiries regarding this proposal.