Health care union calls on California billionaires to stop ‘looming healthcare collapse’

Around 200 of California’s wealthiest residents are being called up to the plate and asked to share their wealth and help support health care in the state.

Health care unions and various labor groups are campaigning to get the Billionaire Tax Act on the 2026 ballot. The initiative would create a one-time, 5% tax on the state’s billionaires that would be reinvested in health care, food assistance and education. Advocates say the alternative is a complete collapse of the state’s health care system.

“California has approximately 200 billionaires living in the state,” said Renée Saldaña, press secretary for SEIU-United Healthcare Workers West, a sponsor of the initiative. “So all we're doing is asking them to step up, pay their fair share … and by doing this, these 200 individuals could stop a healthcare collapse for the 39 million rest of us who live in the state.”

The idea for a wealth tax of this magnitude was thought up in direct response to President Donald Trump’s “One Big, Beautiful Bill,” or HR-1, which passed this year. The budget bill, among other things, will eliminate around $100 billion worth of health care funding in California over the next five years. Medicaid, called MediCal in California, will be severely impacted.

More than one in three Latino Californians are enrolled in Medi-Cal and even more Latinas, just over 42%, are covered by the program, according to the California Budget and Policy Center. Nearly one million Latinos are expected to lose their health insurance as a result of HR-1, according to UnidosUS, a Hispanic civil rights and advocacy nonprofit.

Due to a loss of funding, almost 150,000 healthcare jobs could be cut due to health care facilities that will either close or reduce services, according to Saldaña. The effects of funding cuts are already being seen in higher premium spikes, and Saldaña says that soon, Californians will have to search harder to find services and facilities and when they do find them, they're “going to have to wait twice as long.”

St. John’s Community Health in Los Angeles, former United States Secretary of Labor Robert Reich and UC Berkeley economics professor Emmanuel Saez are also supporters of the initiative. Saez has supported a progressive wealth tax for years and helped draft this measure.

How would a Billionaire Tax Act work? 

The initiative calls for a one-time, 5% tax on the state’s billionaires to be paid over the course of five years. The revenue created from the tax would generate around $100 billion. This money would be directly reinvested into state programs.

In December, the Act was updated to formally add dedicated funding for food assistance programs; the move was a direct response to federal reductions to the Supplemental Nutrition Assistance Program (SNAP). 

The updated funding formula calls for 90% of tax revenue to go toward addressing Medi-Cal and health care cuts and 10% for public education and food assistance programs. The 10% allocation will provide funding for school-based nutrition programs, community food assistance and educational support aimed at children most affected by the federal cuts.

“We feel that those things are also very important to the wellbeing of Californians and those sectors are also going to be facing cuts under HR-1,” said Saldaña. “So it is part of an overall holistic approach to improving California's health for everyone in various ways.”

Opposition at the highest level

Nay-sayers have speculated that a wealth tax of this magnitude would backfire, causing billionaires to leave the state, taking their billions with them. 

“We are the fifth largest economy in the world, and they have benefited from all of the things that California has to offer,” countered Saldaña. “Because of that, we think that it's unlikely that a one-time emergency tax will motivate these folks to leave.”

In the past five years, various wealth tax bills have been introduced and failed in the State Legislature.

Governor Gavin Newsom himself has publicly opposed similar wealth tax bills in the past. In 2024, the governor strongly opposed Assembly Bill 259 which proposed a wealth tax on individuals worth more than $50 million, and the bill died before it ever made it to Newsom’s desk. 

During a New York Times DealBook Summit earlier this month, the governor alluded negatively to the initiative, calling it “a wealth tax that the vast majority of labor opposes, and almost everyone I know opposes,” according to reporting from Politico.

The Governor’s Press Office did not respond to a request for comment on his position.

Despite his seeming disapproval of the wealth tax, SEIU-West believes the governor will come around.

“Knowing that this has broad support across the political and economic spectrum, we're pretty confident that Governor Newsom and other elected officials will come around to support this measure, because it's simple, it's common sense,” said Saldaña. “It's gonna keep hospitals and emergency rooms open across the state, and we all want what the governor and other elected officials want in California. We want a state with a strong middle class where everyone can thrive.” 

Looking forward

The initiative needs over 870,000 signatures by next spring in order to be put on the 2026 ballot. Even though SEIU-West hasn’t started collecting signatures yet, based on the enthusiasm they’ve seen for other initiatives they’re sponsoring, including one to cap health care executive compensation to $450,000 a year, the union is confident they’ll have enough support to present the Billionaire Tax Act to the rest of the state.

“If just the wealthiest, most fortunate people in our society, who have money that most of us can't even dream of spending in 10 lifetimes,” said Saldaña, “if they just step up and pay a modest tax, they can really help save California's health care system for the rest 39 million of us.”