California voters to decide on 5% billionaire tax that aims to generate $100B

Key Points:

• California voters will decide in November on a ballot measure proposing a one-time 5% tax on billionaires with net worth over $1 billion, aiming to raise about $100 billion to offset federal Medicaid funding cuts.
• Approximately 90% of the revenue from the tax would fund health care programs, with the remainder allocated to education and food assistance, as supporters argue it will help keep hospitals and emergency rooms open amid federal funding reductions.
• Governor Gavin Newsom, along with Democratic and Republican gubernatorial candidates, oppose the measure, warning it could drive wealthy taxpayers out of California and destabilize the state's tax base.
• The Legislative Analyst's Office projects the tax would generate tens of billions initially but could lead to a decline in personal income tax revenue over time as taxpayers adjust their behavior.
• The initiative includes provisions for payment installments, deferrals for illiquid assets, and anti-avoidance measures, but opponents contend many billionaires have already moved assets or threatened to leave to avoid such taxes.