Tax insight

California’s proposed Billionaire Tax Act ballot initiative

Insight
5 minute read
January 08, 2026

What happened?

The 2026 Billionaire Tax Act, Initiative No. 25-0024, is a proposed statewide ballot initiative for the November 2026 California ballot that would impose a one-time 5% excise tax on individuals with net worth exceeding $1 billion, with a phase-out between $1 billion and $1.1 billion.

Why is it relevant?

The tax would introduce new and complex valuation methods for net worth and business interests, including a book value plus earnings multiplier calculation, as well as strict rules regarding charitable pledges and trusts. The initiative also signals increasing political focus around taxing wealth in California, which has implications for taxpayers in the state’s top wealth tiers.

If passed, this tax potentially could raise approximately $100 billion in one-time revenue allocated primarily to healthcare funding and food assistance programs through the newly created 2026 Billionaire Tax Reserve Fund.

Notably, the proposal has generated early opposition from Governor Gavin Newsom (D) and the California Chamber of Commerce, forecasting a potentially contentious campaign ahead.

Actions to consider

Taxpayers with net worth near or above the $1 billion threshold should carefully evaluate their asset holdings, particularly those involving complex business interests, trusts, and charitable contributions, given the proposed valuation approaches and inclusion rules. They also may want to consult legal and tax professionals to understand exposure, while engaging with policy stakeholders.

Given the anticipated opposition, taxpayers and advisors should track amendments and the initiative’s progress to be placed on the ballot.