- Billionaire Tax Act proposes 5% levy on wealth above $1B, including unrealized gains.
- Tech leaders warn that the measure could drive capital out of California, citing relocation risks.
- Supporters say revenue will fund healthcare and social programs, defending economic impact.
California lawmakers and labor groups have led to backlash after filing a 2026 ballot measure targeting billionaires’ wealth. In California, crypto and tech leaders reacted this week after SEIU United Healthcare Workers West submitted paperwork for the November 2026 ballot. The proposal seeks a 5% tax on wealth above $1 billion, partly on unrealized gains, to fund healthcare and assistance programs.
What the 2026 Billionaire Tax Act Would Do
The proposal suggests a one-time 5% tax on net worth above $1 billion for people living in California. It would also count gains on stocks and private businesses that haven’t been sold yet. Because of this, some people could end up with big tax bills even though they haven’t actually cashed out any assets.
To address liquidity concerns, the measure allows payment in one installment or over five years with interest. According to the SEIU United Healthcare Workers West union, proceeds would support the state healthcare system and assistance programs. The union has already submitted the required paperwork to election officials.
Still, the proposal must collect nearly 875,000 voter signatures to qualify for the November 2026 election. This requirement means it’s still in the early stages. Even so, simply filing it has already sparked strong discussion across the finance and tech communities.
Industry Pushback Centers on Capital Mobility
Soon after the filing, senior crypto figures raised objections on social media and public forums. Bitwise CEO Hunter Horsley criticized the structure of taxing unrealized gains, citing risks to private equity holdings. Similarly, Kraken co-founder Jesse Powell warned the measure could accelerate departures from California.
“I promise you this will be the final straw,” Powell wrote on X on Sunday. He added that billionaires would leave with their spending, philanthropy, and jobs. These statements quickly circulated among investors and founders.
Castle Island Ventures founding partner Nic Carter focused on capital mobility. He questioned whether policymakers analyzed how quickly wealth can relocate today. Carter compared one-time wealth taxes to signals that more levies could follow.
ProCap BTC chief investment officer Jeff Park echoed those concerns. He suggested the proposal could push capital out of California entirely. Together, these reactions framed the tax as a potential catalyst for relocation.
Related: California Passes “Bitcoin Rights Bill,” Eliminating Tax Restrictions For Payments
Political Defense and Spending Scrutiny
Despite the backlash, supporters continue to defend the proposal. U.S. Representative Ro Khanna, a Democrat representing California’s 17th Congressional District, has publicly backed the measure. In a series of X posts, Khanna argued the tax would fund childcare, housing, and education.
Khanna has also linked those investments to long-term innovation. He described the tax as a way to address inequality while supporting economic growth. His defense places the proposal within broader state funding debates.
However, critics have also questioned how new revenue would be used. Austin Campbell, an NYU professor and founder of Zero Knowledge Consulting, pointed to a December California State Auditor report. That audit cited unaccounted-for or poorly justified public expenditures.
Horsley referenced the same audit when challenging the proposal’s priorities. He argued that state leaders should address waste before seeking new revenue. Meanwhile, Fredrik Haga, CEO of on-chain data platform Dune, cited Norway’s wealth tax experience.
According to Haga, Norway saw significant capital leave after imposing similar taxes. He said the policy raised less revenue than expected. These international comparisons have further shaped the debate.
Meanwhile, California’s proposed 2026 Billionaire Tax Act has united crypto and tech leaders in opposition while drawing political defense from state allies. The measure outlines a one-time 5% wealth tax, includes unrealized gains, and targets healthcare funding. As signature collection begins, public arguments over capital mobility, spending oversight, and revenue use continue to unfold statewide.
