How to Tax a Trillionaire

Over the past few decades, California has imposed its political will on the rest of America and much of the free world, driving social movements such as environmentalism, LGBTQ rights and criminal justice reform. So perhaps it was inevitable that the next phase in the long-running battle over income inequality—how much tax the wealthy are required to pay and what responsibility they bear to preserve a fraying social safety net—would start in the Golden State.

Last summer the largest health-care workers union in the state did the math on the Trump administration’s legislative Ragnarok, the One Big Beautiful Bill Act, and concluded it would open a $150 billion hole in California’s health-care sector over the next 10 years. To stave off the prospect of rural hospitals shuttering, nurses losing their jobs and millions of residents getting booted off their insurance plans, the group launched a ballot initiative it called the 2026 Billionaire Tax Act, a one-time 5% levy on the assets of residents with a net worth of $1.1 billion or more, payable in annual installments of 1% over five years. Then all hell broke loose.