Ro Khanna is trying to stop California’s billionaire tax war before it hits the ballot

Tech leaders and union potentially meeting in March 2026

Rep. Ro Khanna wants to bring Silicon Valley tech leaders and labor union representatives together at Stanford University around March 2026.

The California Democrat wants to negotiate a compromise on the state’s proposed billionaire tax, which has sparked fierce debate between wealthy founders and healthcare workers.

Bloomberg first reported the planned gathering on Jan. 31, 2026, and the meeting marks a shift from escalating conflict to potential deal-making.

What the billionaire tax would do

The proposed Billionaire Tax Act would impose a one-time 5% tax on California residents with a net worth of over $1 billion.

It would apply to stocks, businesses, securities, art, collectibles, and intellectual property, though real estate held directly and retirement accounts would be excluded.

Billionaires could pay the full amount in 2027 or spread payments over five years. Those who choose the five-year option would face a 7.5% annual charge on any unpaid balance.

Healthcare gets 90% of revenue

Proponents say the tax could raise roughly $100 billion, with 90% of that money earmarked for healthcare programs, including Medi-Cal.

The remaining 10% would be split between K-14 public education and food assistance programs. All funds would go into a dedicated reserve account.

The State Legislative Analyst offers a more cautious estimate, saying revenue would likely total tens of billions spread over several years rather than arriving all at once.

About 250 Californians would pay

The tax would affect roughly 200 to 255 California billionaires who were residents of the state on Jan. 1, 2026. Their net worth would be measured as of Dec. 31, 2026.

Married couples would count as one taxpayer with combined assets, and the measure includes a phase-out for those worth between $1 billion and $1.1 billion.

That means someone worth exactly $1 billion would owe less than someone worth $1.5 billion.

The Healthcare union created the measure

The Service Employees International Union-United Healthcare Workers West created the ballot measure and filed paperwork with the state through chief of staff Suzanne Jimenez.

SEIU-UHW represents more than 120,000 healthcare workers in California and has a history of using ballot initiatives as political leverage.

The union has authorized up to $25 million to support the campaign, giving proponents significant resources for the signature-gathering effort ahead.

Federal cuts sparked the proposal

President Trump signed the One Big Beautiful Bill Act on July 4, 2025, cutting nearly $1 trillion from Medicaid nationwide over the next decade.

California’s Medi-Cal program expects to lose about $30 billion annually in federal funding as a result. Proponents call the billionaire tax an emergency response to these federal healthcare cuts.

The Congressional Budget Office estimates 10 million people nationwide will lose coverage because of the law.

Newsom warns of capital flight

Governor Gavin Newsom opposes the tax, warning it would drive billionaires and capital out of California.

He argues the one-time windfall would be followed by ongoing revenue losses that would reduce funding for schools, teachers, firefighters, and police.

Newsom has met with billionaires concerned about losing control of their companies under the proposal. He told reporters the measure is “really damaging” and “bad economics.”

Khanna backs carve-outs for founders

Khanna supports a wealth tax to fund healthcare for working-class Californians, but he backs workarounds for startup founders holding illiquid or restricted stock.

He suggests exempting shares of unprofitable companies within 10 years of founding and deferring the tax until a liquidity event for locked stock.

Khanna says innovation can continue while working-class Californians benefit from the prosperity generated in Silicon Valley.

Some billionaires are already leaving state

Some billionaires have already left California or are preparing to go.

Google co-founder Larry Page moved assets and purchased property in Miami, while Peter Thiel opened an office for Thiel Capital there on Dec. 31, 2025.

Venture capitalist David Sacks relocated to Austin and opened an office in Texas. Y Combinator CEO Garry Tan called for a primary challenge against Khanna in response to his support for the tax.

NVIDIA CEO says he’s fine paying

Not all billionaires oppose the measure. NVIDIA CEO Jensen Huang said he is “perfectly fine” with the proposal, explaining he chose to live in Silicon Valley and will pay whatever taxes apply.

Billionaire Tom Steyer said he would vote for it, and former Labor Secretary Robert Reich supports the tax as a practical solution.

Supporters argue that billionaires would make up the tax amount in about six months through investment gains.

Proponents need 875,000 signatures

California Attorney General Rob Bonta cleared the measure for signatures on Dec. 26, 2025.

Proponents must collect 874,641 valid signatures by June 25, 2026, when the deadline for verification arrives.

If qualified, the measure would appear on the November 2026 ballot and would require a simple majority of voters to pass. Signature gathering is now underway across the state.

Legal challenges are expected if passed

The March 2026 Stanford meeting could lead to a compromise or an alternative proposal that satisfies both sides.

Critics argue the measure may violate due process because it applies retroactively to wealth accumulated before 2026. Legal challenges are expected if voters approve it.

The debate has become a flashpoint in the 2026 governor’s race and is shaping 2028 presidential positioning for California Democrats.

This article was created with AI assistance and human editing.

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