SACRAMENTO—California’s multitude of billionaires, many of them clustered in and around Silicon Valley, may feel heat from outraged voters this fall.
That’s because three major unions in California—the Teamsters, the Service Employees, and the United Health Care Workers West, an AFSCME affiliate—are all now pushing to put a 5% billionaires tax on the November ballot.
And on March 2, Sen. Bernie Sanders, Ind.-Vt., and Rep. Ro Khanna, D-Calif., introduced the same surtax in Congress. There are differences, though, between the California proposal and its legislation.
One is that the referendum would limit the surtax to a year and use its revenues mostly for health care, with 10% reserved for aiding public schools, while the Sanders-Khanna bill would turn the surtax revenue around and redistribute it, in $3,000-per-person checks, to every household with an income of $150,000 or less.
The other difference is that the Sanders-Khanna proposal—which will go nowhere in the GOP-run Congress—is a “messaging” bill to show voters what progressives would enact if they gained power this fall. And it would extend nationwide, not just to California. Khanna is considered a possible contender for the 2028 Democratic presidential nomination, while Sanders ran for that nod in 2016 and 2020.
The billionaire surtax is not a new idea, but the scope of it is. San Francisco and Portland, Ore., both have their own surtaxes on the ultra-rich.
And decades ago, the late Rep. James Oberstar, DFL-Minn., proposed an annual—and confiscatory—surtax on millionaires. Even in Democratic-run Congresses, his idea died.
The unions cite two key reasons for the California surtax. One is rampant income and wealth inequality between the estimated 200 billionaires in the Bay Area and the rest of the state.
The other is that California needs to find billions of dollars to replace Medicare and especially Medicaid money, which the revenge-filled Republican Trump regime in D.C. and its congressional lackeys cut from California and other selected deep-blue states.
The Teamsters, who represent 250,000 workers in Northern California Joint Council 7 and Southern California Joint Council 42, got on board with the referendum idea first, in late January. SEIU and the United Health Care Workers West joined the crusade later and provided more details about the surtax.
“Big Tech Billionaires shed crocodile tears over the idea of paying their fair share of taxes while amassing sky-high piles of cash,” Teamsters California co-chairs Peter Finn and Victor Mineros said then.
“The fight to pass the California Billionaire Tax is a fight to protect workers’ ability to afford living in California. It’s a fight Teamsters California will continue to lead.
“Roughly 200 California billionaires hold an astounding $2 trillion in wealth. Each could spend $500 million a year from their interest earnings alone and not touch a penny of their wealth.
“But for the greedy corporations and their billionaire owners, it’s never enough. They won’t be satisfied until they’ve replaced every worker with a robot that fuels their fortunes.”
Those ultra-rich “are exploiting a rigged system that makes delivery workers and bus drivers pay higher rates than the AI executives trying to wipe away our jobs.”
SEIU and United Health Care Workers starkly headlined the dimensions of the health care crisis in capital letters before getting into the tax’s details, including what the revenue would pay for.
“MASSIVE FEDERAL HEALTH CARE CUTS ARE DRIVING CALIFORNIA’S HEALTH CARE SYSTEM TOWARDS COLLAPSE,” their statement blared.
The two unions explained Trump’s cuts—in his so-called Big Beautiful Bill—would cost California “roughly $100 billion over the next five years. That same law showered $4.5 trillion in tax cuts over 10 years on the billionaires and the 1%.
“Insurance premiums will go up for everyone, and millions of Californians will lose coverage altogether,’ the two unions warned. “Local hospitals, clinics, and nursing homes, home care services that we rely on, will cut services or close.
“Some 145,000 healthcare jobs will disappear, burning out the people who care for our families.”
The one-time 5% surtax on billionaires’ incomes would close that red ink gap and bring in revenue that otherwise would go untaxed, as the billionaires hand it down to their heirs, and thus escape estate taxes.
And much of the billionaires’ $2 trillion in overall wealth “will never be taxed in their lifetimes because of loopholes” they carved out for themselves in tax laws.
Of the estimated $100 billion California’s billionaire surtax would raise, 90% would go to defray health care costs, and the rest to K-12 education and food programs.
The tax revenues, if the referendum passes in November, would “sustain middle-class jobs and the economy they support in health care,” the two unions concluded.
Sanders and Khanna sang much the same tune about their legislation for the national surtax on Jeff Bezos, Elon Musk, the Silicon Valley 200, and the rest of the nation’s 938 billionaires.
Sanders and Khanna said their Make Billionaires Pay Their Fair Share Act would establish a 5% annual wealth tax on U.S. billionaires, “who are now collectively worth $8.2 trillion.” They estimated it would raise $4.4 trillion from the current billionaires over the next decade, with the money earmarked “to address the most pressing crises facing working families.”
“At a time of unprecedented income and wealth inequality, this legislation demands that the billionaire class in America finally pay their fair share of taxes so that we can create an economy that works for all of us, not just the 1%,” Sanders’s statement said. “We can no longer tolerate a corrupt tax code that enables billionaires to pay a lower tax rate than the average worker.
“We cannot continue a trend in which, over the past 50 years, $79 trillion in wealth in our country has been redistributed from the bottom 90% to the top 1%. Enough is enough. Billionaires cannot have it all. It is time to enact a wealth tax on billionaires and use this revenue to address some of the major crises facing working families, the children, the elderly, the sick, and the most vulnerable.”
Added Khanna: “We have a deep economic divide. On one side, places like Silicon Valley are generating extreme wealth. On the other side, families are struggling to cover the cost of health care, housing, and basic needs. We can tax billionaires a modest amount to make sure everyone has a fair chance while keeping our innovative engine. That is why I am proud to join Sen. Sanders to lead the Make Billionaires Pay Their Fair Share Act.”
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