California Tax Pulse

The California Billionaire Tax Act is officially on the November ballot. Late last month, California's Secretary of State certified the measure after proponents submitted well over double the required signatures. Backroom negotiations between Governor Newsom and the union backing the initiative, SEIU-UHW (i.e., United Healthcare Workers West), collapsed at the eleventh hour, and the measure is now headed to voters on November 3, 2026.

We covered the signature milestone in our recent post. The new development worth focusing on is what happened in the days leading up to certification and what it signals about where this fight is going.

Governor Newsom spent the final weeks before the deadline attempting to negotiate the measure off the ballot. The union reportedly offered a concession, dropping the proposed one-time tax rate from 5% to 2%, but Governor Newsom rejected it. The day after the deadline passed, the governor pivoted, publicly calling for a national billionaires' tax rather than a state-by-state approach. His argument: wealth is mobile, and California can't tax what can leave. "The fight belongs at the federal level," he wrote, "where this broken system was created in the first place." Thus, Governor Newsom is now simultaneously arguing that taxing billionaires is the right thing to do nationally while opposing the proposal for California to do it.

Meanwhile, opponents of the measure have already secured their own place on the November ballot. They are backing two counter-initiatives: one that would prohibit retroactive taxes on individually owned assets and another requiring audits of voter-initiative-funded programs. Both are structured to nullify the Billionaire Tax. Under California’s majority-vote rule, if either counter-initiative receives more votes than the Billionaire Tax, it prevails and the tax measure fails. Opponents have already spent over $80 million to fund these efforts, and that number is expected to grow substantially.

For California tax practitioners and their clients, the ballot positioning of all three measures matters. Voter confusion is a real risk when the same ballot presents competing tax propositions with overlapping legal consequences. The retroactivity feature of the Billionaire Tax Act, which would apply to billionaires who were California residents as of January 1, 2026, already raises serious constitutional questions that courts will almost certainly have to resolve if the measure passes.

For now, the race is officially on. We'll keep tracking developments as the November vote approaches.