A proposal to impose a 5% tax on the ultra-wealthy in California is sparking intense debate, as a business group warns that the bill could expand its scope in the future, potentially impacting the middle class.
According to a memo from the California Business Roundtable, the "2026 Billionaire Tax Act" allows the state legislature to amend the content with a two-thirds majority vote, as long as the changes remain "consistent with the purpose" of the act. This provision has raised concerns that the tax threshold could be lowered below $1 billion or that current exemptions could be removed.
The organization's president, Rob Lapsley, argued that the bill is designed with a broader scope than voters might initially realize.
On the other hand, representatives from SEIU United Healthcare Workers West dismissed this claim, asserting that the law is intended as a one-time assessment on billionaires to fund healthcare, education, and food assistance, and that any amendments must not alter the core objectives.
Supporters say the tax could generate approximately $100 billion over five years to fund public programs. Meanwhile, opponents warn of potential job losses and capital flight from the state.
Influential figures like Bernie Sanders have expressed support, while Governor Gavin Newsom has maintained an opposing stance.
The bill is expected to be put to a referendum this November after gathering more than 1.6 million supporting signatures.
