California Billionaires in Panic: Inside Their Chaotic Fight Against the 5% Wealth Tax

California’s roughly 200 billionaires are facing a real possibility of handing over 5% of their net worth in a one-time tax. The proposal, pushed by a powerful healthcare workers’ union, has sparked an unusually disorganized and expensive counter-campaign among the state’s tech elite — complete with a private Signal chat, millions in political spending, failed candidate recruitment, and aborted secret strategy sessions.

The Proposal: A One-Time Hit on the Ultra-Wealthy

California Billionaires in Panic: Inside Their Chaotic Fight Against the 5% Wealth Tax The California Billionaire Tax Act, sponsored by SEIU United Healthcare Workers West (SEIU-UHW), would impose a one-time 5% tax on the net worth of individuals worth more than $1 billion.

Proponents estimate it could raise around $100 billion, with the vast majority directed toward healthcare to offset deep federal funding cuts. A smaller portion would support public education and food assistance programs.

The tax treats voting shares in private companies as part of taxable wealth, which critics say unfairly targets entrepreneurs who built their fortunes in California. Supporters frame it as an emergency measure to prevent hospital closures and protect healthcare access amid federal policy changes.

Strong Public Support and Signature Success

The initiative needed roughly 875,000 valid signatures to qualify for the November 2026 ballot. By April 2026, SEIU-UHW had submitted approximately 1.55–1.6 million signatures — nearly double the requirement. The measure enjoys solid (though not overwhelming) public support, with polls showing around 50% approval.

This grassroots momentum has put the proposal on a fast track, creating urgency for opponents.

Billionaires’ Response: From Exodus to Signal Chat Chaos

Faced with the threat, some billionaires relocated out of state before the January 1, 2026, deadline to avoid the tax. Others chose to fight back.

California Billionaires in Panic: Inside Their Chaotic Fight Against the 5% Wealth Tax In fall 2025, a private Signal group chat formed among dozens of Forbes-listed billionaires and near-billionaires.

Participants included high-profile names such as:

Google co-founder Sergey Brin;
Venture capitalist Marc Andreessen;
Sequoia Capital’s Michael Moritz;
Y Combinator CEO Garry Tan;
PayPal co-founder Max Levchin;
Ripple co-founder Chris Larsen;
Coinbase CEO Brian Armstrong;
Investor Ron Conway;
And others like Patrick Collison (Stripe), Neil Mehta, and more.

The chat began with venting about the tax, unions, and California’s political direction. Brainstorming included unconventional ideas, such as acquiring the company collecting signatures for the union initiative and then halting the effort. That approach was apparently not pursued.

No unified strategy emerged.

The group splintered into smaller factions that began pouring money into anti-tax organizations and PACs:

Building a Better California received a $25 million seed from Sergey Brin and ultimately raised over $100 million (including contributions from Moritz, Collison, and others). It qualified counter-initiatives aimed at invalidating or complicating the tax measure.
Golden State Promise raised about $10 million from Chris Larsen and ran attack ads.
Other groups and the California Business Roundtable also received significant funding.

The core argument repeated across these efforts: such a tax would “destroy innovation” in California, drive talent and capital out of the state, and harm long-term economic growth.

Failed Experiments and Internal Disarray

As more anti-tax groups sought funding, the volume of requests reportedly became overwhelming. Organizers considered a “Shark Tank”-style secret Zoom session where billionaires (with faces obscured for privacy) would hear pitches from various organizations. The idea was scrapped out of fear that it would leak to the press.

Billionaires also backed candidates in the gubernatorial and other races, including tech founder Ethan Agarwal and San Jose Mayor Matt Mahan. Both performed poorly in the June 2026 primaries (Agarwal around 6.5%, Mahan around 3.7%), despite donor support.

A consultant quoted in reporting on the effort summarized the disarray: many billionaires are “bold, and their tactics are stupid. None of it has worked, because they don’t know what they’re doing.”

The Governor Factor and the June 25 Deadline

Much now hinges on Governor Gavin Newsom, who has publicly opposed the initiative, arguing it threatens the state’s innovation economy and could accelerate capital flight.

Newsom is working aggressively behind the scenes to broker a compromise bill before the June 25, 2026, deadline for ballot qualification. If the union accepts an alternative legislative deal, it could withdraw its intiative. Other unions and groups have already begun criticizing or distancing themselves from the original proposal.

California Billionaires in Panic: Inside Their Chaotic Fight Against the 5% Wealth Tax Billionaires remain wary of fully backing Newsom-led efforts, fearing he might cut a deal with the union that still imposes significant costs on them.

What’s Next?

If no compromise is reached by the deadline, the measure is expected to appear on the November 2026 ballot. The fight has already reshaped political giving in California’s tech community, creating new networks and super PAC infrastructure.

California Billionaires in Panic: Inside Their Chaotic Fight Against the 5% Wealth Tax The episode highlights a classic tension: between calls for the ultra-wealthy to contribute more during fiscal crises and concerns that heavy taxation on capital and entrepreneurs could undermine the very ecosystem that generates wealth and jobs.

Whether the “5% freakout” succeeds in stopping the tax — or whether California voters ultimately approve it — will be one of the more closely watched political and economic stories of 2026.

Sources: Primary reporting from The San Francisco Standard (June 13, 2026) and related coverage of the initiative’s signature status and political context.

The battle continues. Who are you rooting for in this story — the billionaires or the push for broader public funding?