"California Governor Gavin Newsom has decided to wage an all-out battle against one of the most ambitious and controversial tax proposals in the state's recent history: a one-time 5% tax on the wealth of billionaires. The plan, called the 2026 Billionaire Tax Act, has not yet reached the ballot, but it has already sparked a chain reaction that includes threats of capital flight, strategic moves by some of the country's richest men, and intense political confrontation."
"The proposal, promoted by the Service Employees International UnionUnited Healthcare Workers West (SEIU-UHW), proposes to tax California residents whose fortunes exceed $1 billion. Its proponents claim that the measure would affect about 200 people and generate tens of billions of dollars. Most of that money would go toward funding the state's healthcare system, as well as strengthening education and food assistance programs, in response to federal cuts approved last year."
"Newsom, however, believes that this tax would not solve the problems and could cause even bigger ones. In recent interviews, the governor has reiterated that he opposes the tax not because he rejects progressive taxation, but because it is a tax on assets rather than income. In his view, this difference is crucial. He pointed out that California already has the most progressive income tax system in the country and relies heavily on higher-income taxpayers to sustain its budget."
The 2026 Billionaire Tax Act would impose a one-time 5% tax on net worth above $1 billion for California residents, calculated based on assets held December 31, 2026. The measure is promoted by SEIU-UHW and is projected to affect about 200 people and raise tens of billions of dollars for healthcare, education, and food assistance partly in response to recent federal cuts. Taxpayers could pay over five years and defer payment for illiquid assets until sale. Governor Gavin Newsom opposes the tax on the grounds that it targets assets rather than income, could exacerbate problems, and might prompt capital flight and strategic moves by wealthy individuals.
Read at english.elpais.com
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