A group of unions in California is pushing for a new plan to pay for healthcare: imposing what they call a ‘Billionaire Tax’. This 2026 ballot initiative would levy a 5% tax on the state’s billionaires, aiming to raise funds for health programs and providers.
Sally Pipes strongly disagrees. She argues this approach represents “a tragically short-sighted idea.” Citing precedents like Norway, where a wealth tax increase drove away rich residents and depleted government revenue far outweighing what was collected, Pipes contends that targeting the state’s wealthy will likely backfire catastrophically.
She explains:
“The new tax would ‘help us keep health care facilities open. It will stabilize premiums and coverage for all Californis,’ according to one proponent.”
But Pipes warns there’s no guarantee they’ll have billions left to collect by the time healthcare costs mount. She predicts many billionaires might simply leave California, seeking more favorable climates elsewhere.
California already faces a significant population drain due in part to its heavy tax burden. Between July 2023 and earlier this year (based on text date), it lost over 400,000 residents while the billionaire tax initiative was still gathering support.
The proposed tax could worsen an existing trend. As Pipes puts it:
“Based on the figures provided by the initiative’s supporters, hitting California’s billionaires with a new levy would risk evaporating nearly one-quarter of the state’s personal income tax revenue.”
She concludes:
“The ballot initiative caps annual spending from this source at $25 billion… risking a recurring loss in personal income tax revenue for the hope of getting only a small boost.”
