California billionaire tax odds plunge to 35% as Newsom pushes back

Governor Gavin Newsom's opposition has slashed the probability of California's billionaire tax reaching the November ballot from 88% to 35% in a week.

California's proposed 5% billionaire wealth tax faces dwindling odds of appearing on the November ballot after Governor Gavin Newsom mounted a campaign to kill the measure, with Kalshi prediction market odds plunging from 88% to 35.5% since June 9.

"The governor has made clear that a one-time wealth tax on billionaires would destabilize California's revenue base and risk driving high-net-worth residents out of state," a senior administration official familiar with Newsom's strategy told local media.

The Service Employees International Union-United Healthcare Workers West submitted 1.5 million signatures on April 27, nearly double the 874,641 valid signatures required by the June 25 certification deadline. But Polymarket odds fell to 31% Tuesday from 90% at the start of the month, reflecting growing skepticism that the initiative can survive political headwinds from Newsom and Democratic-aligned groups.

If certified, the measure would impose a one-time 5% levy on net worth exceeding $1 billion, potentially raising tens of billions for health care, education and food assistance programs. More than 80 billionaires on the 2025 Forbes 400 list reside in California, and the state already relies heavily on high earners for income tax revenue — a concentration critics say a wealth tax would exacerbate.

The opposition coalition widens

Newsom and his allies have assembled a broad coalition against the measure that includes labor unions, health care organizations and business groups. Groups representing teachers, construction workers and law enforcement have broken ranks with SEIU-UHW, intensifying pressure on proponents to withdraw the initiative before the June 25 deadline. SEIU-UHW chief of staff Suzanne Jimenez pushed back, saying "the number of people who have privately resisted pressure to oppose the billionaire tax is far greater than the small number who have opposed it."

Billionaires have also poured money into the fight. PayPal and Palantir co-founder Peter Thiel, worth $27.9 billion according to Forbes, donated $3 million in December to the California Business Roundtable, which opposes the tax. Former Google Chief Executive Eric Schmidt, worth $40.6 billion, donated $1 million to the same group in March. Google co-founders Larry Page and Sergey Brin, each worth more than $250 billion, have already moved some of their businesses out of state, according to the New York Times.

Voter support fades amid political headwinds

A UC Berkeley Citrin Center for Public Opinion Research-Politico poll conducted in late February found roughly 50% of registered voters supported a one-time wealth tax, with 28% opposed. But the measure's momentum has weakened since then, as San Francisco voters recently rejected a separate tax on high earners — a signal that enthusiasm for wealth taxes may be cooling even in California's most progressive city.

The last time California voters weighed a major tax expansion was Proposition 30 in 2012, which raised income taxes on high earners to fund education. That measure passed with 55% support during a different fiscal environment. Today's political dynamics — with a sitting governor actively opposing new wealth taxes and billionaire-funded opposition campaigns — suggest a steeper climb.

The California Secretary of State must certify the initiative by June 25 for it to reach the November ballot. If the measure fails to qualify, proponents would need to restart the signature-gathering process for a future election cycle, likely 2028.

This article is for informational purposes only and does not constitute investment advice.