In brief
- California will vote on a proposed wealth tax in November.
- Home to many billionaires and their companies, the proposed tax has many supporters — and powerful critics.
In November, California will vote on a proposal to levy a one-off 5 per cent tax on the wealth of all billionaires in the state.
Google co-founder and billionaire Sergey Brin has already spent US$100 million on political donations to a group opposing the tax. Brin is hoping to avoid a potential tax bill of US$13 billion, a return of roughly 130-to-1 if that investment is successful.
Advocates of the billionaire tax claim it would raise US$100 billion in revenue, to be allocated directly to state-funded healthcare, food assistance and public education.
Supporters of the union-backed proposal also highlight that most billionaires currently pay lower marginal rates of tax than the average worker, and that the revenue is desperately needed to fill gaps in funding created by US President Donald Trump’s cuts to Medicaid.
Its critics, which include California’s Democratic Governor Gavin Newsom, argue the measure will drive billionaires and their tax revenue to leave the state.
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Taxing the ultrawealthy
Similar measures targeting the ultrawealthy are currently under consideration around the world.
In New York, Mayor Zohran Mamdani has proposed a 2 per cent income tax increase for those earning over US$1 million, and passed a property surcharge tax on second homes. Other US states — including Washington state, Maine and Minnesota — have passed or are considering similar income or wealth tax measures.
In the United Kingdom, a group of 120 millionaires have launched a “Proud to Pay” campaign asking the government to levy an additional 2% tax on wealth over £10 million.
Spiralling global inequality
Behind the public discussion of California’s billionaire tax lies a much deeper debate about spiralling global inequality.
Recent data from the US shows the share of economic output flowing to workers has dropped to a record low of 52.9 per cent in 2026. This means for every US$100 the economy produces, workers take home US$52.90 in pay, the smallest share since records began in 1947.
Similar trends have been observed around the world.
Conversely, the wealth of billionaires has accelerated rapidly. As of 2026, Forbes reports a global record 3,428 billionaires.
Perhaps most symptomatically, in June Elon Musk briefly became the world’s first trillionaire after the public launch of SpaceX. His wealth now sits at around US$800 billion.
The causes of inequality
Some blame globalisation for this explosion of inequality, but there are two other important related factors to consider as well.
The first is the global decline of the trade union movement. With union membership and power declining around the world, the ability of workers to negotiate for better wages has declined.
The second is a trend of corporate consolidation into a small number of large superstar firms. These companies, which include tech giants like Alphabet, Amazon, and Uber, wield monopoly-like powers. This reduces competition and allows these firms to drive down wages.
The rise of artificial intelligence and automation will only accelerate these trends, enabling the largest firms to shed even more workers even as the firms’ output and profitability continues to climb.
Workers feel the crunch
For the last couple of decades, stagnating wages have been propped up by cheap access to credit. With central banks using unconventional policies to keep interest rates low, household spending has remained largely stable, funded by an increase in household debt.
However, with inflation rising, central banks around the world have pushed up interest rates from emergency lows during the pandemic, cutting off the source of cheap credit. With inflation rising faster than wages, the effect has been real declines in living standards.
Unsurprisingly, voters are unhappy at this “cost of living” crisis, and all over the world have turned away from incumbents and established parties.
A jump to the left?
If the previous decade’s politics have been dominated by dissent on the right, many countries are now seeing the emergence of stronger dissent on the left.
After Mamdani’s headline-grabbing victory in New York, Democratic Socialists have ridden a wave of momentum to win a series of primary races. Beyond the US, we can note left-independent Catherine Connolly’s election as Irish president, the rise of the Greens in the UK, and the recent resurgence of left-wing Die Linke in Germany.
These different parties and leaders all share a focus on combating growing global inequalities of wealth and power. Billionaires, the most obvious and visible symbol of global wealth inequalities, are an obvious target.
However, as California’s proposal shows, attempts to rein in the wealth and power of billionaires should expect furious backlash from billionaires themselves.
In addition to Brin’s US$100 million, other billionaire donors including Peter Thiel, Eric Schmidt and Chris Larsen have also spent significantly to oppose the tax. Brin’s campaign committee has also organised competing ballot propositions which, if passed, would nullify the tax.
For now, polling suggests the billionaire tax is supported by a majority of voters. More than 1.6 million Californians signed the petition to put the tax on the November ballot.
The future of wealth inequality
California’s coming election will serve as an important test of the political power of the billionaire class, and the broader health of American democracy.
Yet even if the tax is successful, taxing billionaires only treats a symptom of global inequality, rather than addressing its underlying causes.
A policy agenda for seriously addressing wealth inequality must also therefore include a much broader suite of measures. These might include improving workers’ bargaining power, breaking up monopolies and public ownership of AI technology.
Without these structural fixes, we should expect voter anger and the current political instability around the world to continue to escalate.
Henry Maher is a lecturer in politics at the Department of Government and International Relations at the University of Sydney. Maher does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
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