proposal

Walt Disney Co. Chief Executive Bob Iger, who soon will begin winding down his two-decade tenure leading the company, collected $45.8 million in compensation last year — an 11% bump from the prior year.

In 2024, Iger was paid $41 million in compensation.

Disney released its corporate executive compensation packages Thursday, as the board prepares for its high-wire act of picking a new leader to replace Iger, whose contract ends in December.

“Management succession planning remains a top priority for the board, reflecting its importance to business continuity and long-term shareholder value,” Disney Chairman James Gorman wrote in a letter to shareholders. He noted the board’s succession committee has been evaluating the various candidates and that the full board would soon determine who will become the next CEO.

Four internal candidates have been vying for the job, including the parks boss, Josh D’Amaro, top television and streaming executive Dana Walden, movie studio head Alan Bergman and ESPN Chairman Jimmy Pitaro.

Unlike six years ago when the board made its last CEO switch, Disney’s board tightened up the succession process by establishing a dedicated committee headed by Gorman, the former head of investment bank Morgan Stanley.

The group also includes General Motors CEO Mary Barra, Lululemon Athletica CEO Calvin McDonald and Jeremy Darroch, the former head of Sky broadcasting in Britain. “Each internal candidate is going through a rigorous preparation process, including mentorship from Mr. Iger, external coaching and engagement with all directors,” Disney said in its proxy.

Disney said it will hold a virtual shareholder meeting March 18. Investors will be asked to vote on several shareholder-inspired measures, including proposals on the company’s climate commitments and disability accommodations in its theme parks.

The conservative National Center for Public Policy Research has introduced a proposal that would require Disney to issue a report detailing its return on investment for its climate commitments. The think tank argues that shareholders need more information to judge whether the company’s public promises to reduce its greenhouse gas emissions is in their best financial interest.

Disney has encouraged shareholders to vote no on this proposal, saying its approach to environmental sustainability is “grounded in science” and already disclosed publicly. The company said a new report, such as the one urged by the proposal, would fall outside financial disclosure requirements.

Shareholders will also weigh in on a proposal that would push Disney to conduct a third-party assessment of its accessibility and disability inclusion practices.

The proposal, which was submitted by shareholder Erik G. Paul, comes as Disney has received criticism over disability access policies at its theme parks.

Disney urged shareholders to vote no on this measure, saying the company is “committed to the design and implementation of innovative and effective services that accommodate persons with disabilities and already reviews its practices on an ongoing basis.”

The company also said it already provides “detailed” information online and in-person in the parks about its disability access policies, which can include no waiting in standby lines for visitors who require that option, as well as a “broad range” of accommodations.

A new board member — Apple’s former chief operating officer Jeff Williams — is expected to join the board at the March meeting.

Iger’s base salary was $1 million. He received $21 million in stock awards, $14 million in options and a $7.25 million executive bonus.

Disney also paid more than $568,000 for Iger’s personal air travel expenses, as well as $1.8 million in security costs. The company said its CEO is required to use a corporate aircraft for personal travel due to security reasons.

The Burbank media and entertainment company said Iger was rewarded for Disney’s strong theatrical performance in the last year, including billion-dollar blockbusters “Moana 2,” which was released in 2024 but reached that milestone last year due to strong carryover at the box office, as well as the live-action adaptation of “Lilo & Stitch.”

The company also cited Iger’s role in successfully closing Disney’s acquisition of Hulu through contentious arbitration proceedings with Comcast, which Disney said bolstered the streaming platform’s presence globally.

Iger also supervised the launch of the direct-to-consumer ESPN Unlimited app and theme park milestones, including Disneyland’s 70th anniversary and the opening of new attractions like Tiana’s Bayou Adventure ride, which Disney said “aim to better position our parks for the future.”

Succession has become a front-burner issue for the company.

The board said it has provided contract extensions to four of Iger’s top lieutenants “in order to retain our key senior leadership to promote a successful CEO succession process.” Those executives are Chief Financial Officer Hugh F. Johnston, Chief Legal Officer Horacio Gutierrez, Chief People Officer Sonia L. Coleman and Chief Communications Officer Kristina K. Schake.

Johnston received a package valued at $20.2 million; Gutierrez was paid $16.3 million; Coleman received $7.4 million and Schake was awarded $6.2 million in compensation.

Jan. 22 (Asia Today) — South Korea’s Democratic Party split into competing camps Thursday after party leader Jeong Cheong-rae abruptly proposed a merger with the Rebuilding Korea Party, drawing praise from some lawmakers and backlash from others who said the move bypassed internal procedure.

Jeong announced the proposal at an emergency news conference at the National Assembly, saying the merger was needed to support President Lee Jae-myung’s administration and win the June 3 local elections.

Chief spokesperson Park Soo-hyun said the party had held prior discussions with the Rebuilding Korea Party and reached an understanding Wednesday afternoon on making the proposal public.

Critics inside the Democratic Party said there was no internal deliberation despite the scale of the decision.

Rep. Jang Cheol-min wrote on Facebook that even members of the party’s supreme council learned of the plan only about 20 minutes before the news conference, saying decisions that determine the party’s future should not be made through surprise announcements.

Rep. Kim Yong-min said the leader should not decide the issue alone. Supreme Council member Han Jun-ho and Rep. Mo Kyung-jong also stressed procedural legitimacy, saying the party should first confirm the will of its members.

Supporters framed the move as a step toward consolidating the progressive bloc. Rep. Park Ji-won said the party must take risks to secure victory, while Rep. Choi Min-hee said she welcomed the proposal as a way to build a stronger progressive force.

Cho Kuk, who leads the Rebuilding Korea Party, said Jeong’s proposal carried significant weight and that his party would gather views through its party affairs committee.

Presidential office spokesperson Kang Yu-jeong said the office was monitoring developments as an issue for the National Assembly, adding there had been no prior discussion.

— Reported by Asia Today; translated by UPI

© Asia Today. Unauthorized reproduction or redistribution prohibited.

The battle over a new tax on California’s billionaires is set to heat up in the coming months as citizens spar over whether the state should squeeze its ultra-rich to better serve its ordinary residents.

The proposed billionaire tax that triggered the tempest is still far from being approved by voters or even making the ballot, but the idea has already sparked backlash from vocal tech moguls — some of whom have already shifted their bases outside the state.

Under the Billionaire Tax Act, Californians worth more than $1 billion would pay a one-time 5% tax on their total wealth. The Service Employees International Union-United Healthcare Workers West, the union behind the act, said the measure would raise much-needed money for healthcare, education and food assistance programs.

Other unions have piled on billionaires, targeting the rich in Los Angeles.

A group of Los Angeles labor unions said Wednesday that it is proposing a ballot measure to raise taxes on companies whose chief executive officers earn 50 times more than their median-paid employees.

Here is how this fight could continue to play out in the Golden State:

Who would be affected?

The California billionaire tax would apply to about 200 California billionaires who reside in the state as of Jan. 1. Roughly 90% of funds would go to healthcare and the rest to public K-14 education and state food assistance.

The tax, due in 2027, would exclude real estate, pensions and retirement accounts, according to an analysis from the Legislative Analyst’s Office, a nonpartisan government agency. Billionaires could spread out the tax payment over five years, but would have to pay more.

Which billionaires are already distancing themselves from California?

Google co-founders Larry Page and Sergey Brin

Google is still headquartered in California, but December filings to the California Secretary of State show other companies tied to Page and Brin recently converted out of the state.

One filing, for example, shows that one of the companies they managed, now named T-Rex Holdings, moved from Palo Alto to Reno last month.

Business Insider and the New York Times earlier reported on these filings. Google didn’t respond to a request for comment.

Palantir co-founder Peter Thiel

Thiel Capital, based in Los Angeles, announced in December it opened an office in Miami. The firm didn’t respond to a request for comment. Thiel recently contributed $3 million to the political action committee of the California Business Roundtable, which is opposing the ballot measure, records provided to the Secretary of State’s Office show.

Oracle co-founder and Chief Technology Officer Larry Ellison

Years before the wealth tax proposal, Ellison began pulling back from California, but he’s continued to distance himself farther from the state since the proposal emerged.

Last year, Ellison sold his San Francisco mansion for $45 million. The home on 2850 Broadway was sold off-market in mid-December, according to Redfin.

Oracle declined to comment.

DoorDash co-founder and Chief Technology Officer Andy Fang

Fang, who was born and raised in California, said on X that he loves the state but is thinking about moving.

“Stupid wealth tax proposals like this make it irresponsible for me not to plan leaving the state,” he said.

DoorDash didn’t respond to a request for comment.

What would it still take to become law?

To qualify for the ballot, proponents of the proposal, led by the healthcare union, must gather nearly 875,000 registered voter signatures and submit them to county elections officials by June 24.

If it makes it on the November ballot, the proposal would be the focus of intense scrutiny and debate as both sides have already lined up big war chests to bombard voters with their positions. A majority of voters would need to approve the ballot measure.

Lawyers for billionaires have also signaled the battle won’t be over even if the ballot measure passes.

“Our clients are prepared to mount a vigorous constitutional challenge if this measure advances,” wrote Alex Spiro, an attorney who has represented billionaires such as Elon Musk in a December letter to California Gov. Gavin Newsom.

What are the initiative’s chances?

It’s unclear if the ballot measure has a good chance of passing in November. Newsom opposes the tax, and his support has proved important for ballot measures.

In 2022, he opposed a ballot measure that would have subsidized the electric vehicle market by raising taxes on Californians who earn more than $2 million annually. The measure failed. The following year, he opposed legislation to tax assets exceeding $50 million. The bill was shelved before the Legislature could vote on it. A bill that would impose an annual tax on California residents whose net worth surpassed $30 million also failed in 2020.

However, Sen. Bernie Sanders (I-Vt.) and Rep. Ro Khanna (D-Fremont) have backed the wealth tax proposal, and Californians have passed temporary tax measures before. In 2012, they approved Proposition 30 to increase sales tax and personal income tax for residents with an annual income of more than $250,000.

Could it solve California’s problems?

The Legislative Analyst’s Office said in a December letter that the state would probably collect tens of billions of dollars from the wealth tax, but it could also lose other tax revenue.

“The exact amount the state would collect is very hard to predict for many reasons. For example, it is hard to know what actions billionaires would take to reduce the amount of tax they pay. Also, much of the wealth is based on stock prices, which are always changing,” the letter said.

California economist Kevin Klowden said the tax could create future budget problems for the state. “The catch is that this is a one-off fix for what is a systemic problem,” he said.

Supporters of the proposal said the measure would raise about $100 billion and pushed back against the idea that billionaires would flee.

“We see a lot of cheap talk from billionaires,” said UC Berkeley law professor Brian Galle, who helped write the proposal. “Some people do actually leave and change their behavior, but the vast bulk of wealthy people don’t, because it doesn’t make sense.”

Still, the pushback has been escalating.

Palo Alto-based venture capitalist Chamath Palihapitiya estimates that the lost revenues from the billionaires who have already left the state would lead to more losses in tax revenues than gained by the new tax.

“By starting this ill-conceived attempt at an asset tax, the California budget deficit will explode,” he posted on X. “And we still don’t know if the tax will even make the ballot.”

The union backing the initiative says “the billionaire exodus narrative” is “wildly overstated.”

“Right now, it appears the overwhelming majority of billionaires have chosen to stay in California past the Jan. 1 deadline,” said Suzanne Jimenez, chief of staff at SEIU-United Healthcare Workers West. “Only a very small percentage left before the deadline, despite weeks of Chicken Little talking points claiming a modest tax would trigger a mass departure.”

Times staff writer Seema Mehta contributed to this report.

California has billionaires on the brain.

Last week union activists, hoisting giant cutouts of money bags and a cigar-smoking boss, announced a proposal to raise Los Angeles city taxes on companies with “overpaid” chief executives.

They rallied in front of a symbol of the uber rich: the futuristic, steel-covered Tesla Diner owned by Elon Musk, the world’s richest man.

Meanwhile, a “billionaire tax” proposal prompted some of the wealthiest Californians to consider fleeing the state, amid arguments that they would take their tax revenue — and the companies they run — with them, hurting the ordinary residents the proposal is designed to help.

The focus on taxing the richest of the rich comes amid a growing affordability crisis in California, home to the nation’s most expensive housing market and highest income tax.

More than 200 billionaires reside in California, more than any other state, according to a group of law and economics professors at UC Berkeley, UC Davis and the University of Missouri who helped draft the statewide billionaire tax proposal, which proponents are hoping to place on the November ballot.

And they are getting richer. The collective wealth of the state’s billionaires surged from $300 billion in 2011 to $2.2 trillion in October 2025, according to a December report by those professors. In Los Angeles, where the median sale price of $1 million puts home ownership out of reach for many residents, prominent billionaires include David Geffen, Steven Spielberg and Magic Johnson.

One conspicuous billionaire is especially unpopular in California: President Trump, who, despite campaigning on bringing down the cost of living, recently called the word “affordability” a “con job” as he redecorated the White House in gold.

“In a deep blue state like California that has voted against Donald Trump by such large numbers in the last three elections, voters are even more predisposed to be suspicious of billionaires, because he’s now the person with whom they associate the status,” said Dan Schnur, a politics professor at USC, UC Berkeley and Pepperdine.

The state and local tax-the-billionaires proposals, he said, are “about retribution,” much like last year’s Proposition 50, which temporarily redraws the state’s congressional districts to favor Democrats as a counterweight to Trump’s efforts to increase Republican seats in Texas.

To get the statewide billionaire tax proposal on the November ballot, supporters need to collect nearly 875,000 signatures by June 24.

The measure would impose a one-time tax of up to 5% on taxpayers and trusts with assets, such as businesses, art and intellectual property, valued at more than $1 billion. It would apply to billionaires who were residents of the state on Jan. 1, with the option of spreading the tax payment over five years.

Service Employees International Union-United Healthcare Workers West, its main backer, said it will raise $100 billion. Most of those funds would be used for healthcare programs, with the remaining 10% going to food assistance and education programs, the union said.

Suzanne Jimenez, the union’s chief of staff, said Friday that “catastrophic” federal funding cuts stemming from Trump’s One Big Beautiful Bill Act will force hospitals to close, eliminate healthcare jobs and cause insurance premiums to spike, leaving senior citizens and veterans with limited access to services.

The California Budget & Policy Center estimates that as many as 3.4 million Californians could lose Medi-Cal coverage and rural hospitals could close unless a new funding source is found.

Jimenez called the proposal “a modest tax” that “affects few people.”

But Gov. Gavin Newsom vowed to stop the billionaire tax, arguing that California can’t isolate itself from the other 49 states.

“We’re in a competitive environment. People have this simple luxury, particularly people of that status, they already have two or three homes outside the state,” Newsom said at the New York Times’ DealBook Summit last month. “It’s a simple issue. You’ve got to be pragmatic about it.”

The billionaire tax would temporarily increase revenues by tens of billions spread over several years, but if billionaires move away, the state could lose “hundreds of millions of dollars or more per year,” according to the nonpartisan California Legislative Analyst’s Office.

Some of California’s wealthiest say they are indeed heading for the exits.

Andy Fang, the billionaire co-founder of DoorDash, wrote on social media: “I love California. Born and raised there. But stupid wealth tax proposals like this make it irresponsible for me not to plan leaving the state.”

Peter Thiel, the billionaire co-founder of PayPal and Palantir, announced in December that his investment firm opened a new Miami office. He donated $3 million that month to a political action committee connected to the California Business Roundtable, which is fighting the measure.

State records show that Google co-founders Larry Page and Sergey Brin have been cutting ties to California and moving business interests out of state.

Rick Caruso, the billionaire real estate developer who self-funded his losing 2022 L.A. mayoral campaign to the tune of more than $100 million, said in a statement that “the proposed 5% asset tax is a very bad policy. It will deliver nothing it promises and instead hurt California with lost jobs and hundreds of millions a year in lost revenue from existing income taxes.”

Ending months of speculation, Caruso announced Friday he will not challenge Mayor Karen Bass again, nor will he run for governor in a race that includes billionaire hedge fund founder Tom Steyer.

In Los Angeles, supporters of the “Overpaid CEO Tax” announced outside the Tesla Diner that they must collect 140,000 signatures in the next 120 days to get the measure on the November ballot. The measure would raise taxes on companies whose CEOs make at least 50 times more than their median-paid employee. It would apply only to companies with 1,000 or more employees.

The Fair Games Coalition, a collection of labor groups including the Los Angeles teachers union, is sponsoring the measure, which would allocate 70% of the revenue to housing for working families, 20% to street and sidewalk repairs and 5% to after-school programs and access to fresh food.

Business groups have denounced it, saying it would drive companies out of the city.

“Luxury for a few, while those who cook, who clean, who build, who teach, who write — the people who make the city prosperous — are stretched to the breaking point,” Kurt Petersen, co-president of the airport and hotel workers union Unite Here Local 11, said at Musk’s diner, describing it as an avatar for an unjust L.A. economy.

A similar effort to increase taxes on companies with disproportionately paid CEOs is underway in San Francisco, where voters already approved a levy on such businesses in 2020.

On Friday, Doug Herman, a spokesperson for Bass’ reelection campaign, said she has “not taken a position” on the state or city wealth tax proposals. But at her campaign launch last month, Bass framed the mayoral race as “a choice between working people and the billionaire class who treat public office as their next vanity project.”

Jeremy Padawer, a toy industry executive and animated TV producer who lost his home in the Palisades fire, said the mayor’s framing of the race as a battle against billionaires feels contrived, especially given the intense criticism of her handling of the fire.

Power is as relevant as money, and Bass is “the most powerful person in the room,” said Padawer, who organized the “They Let Us Burn” rally on the one-year anniversary of the fire.

“I know a lot of billionaires,” Padawer said. “And I think that billionaires have a propensity to do a lot of good, but they also have the propensity to do a lot of bad.”

Times staff writer Queenie Wong contributed to this report.

SACRAMENTO — Reacting with anger and despair, welfare recipients and advocacy groups predicted Monday that Gov. Pete Wilson’s proposed initiative to cut aid payments to families with children would only serve to increase hunger and homelessness among California’s poor.

With housing costs already taking most of each month’s welfare payment, the groups said, even the 10% cut proposed for all recipients would force more families onto the streets. The proposal also calls for an additional 15% cut for the able-bodied after six months.

“I wouldn’t be able to live anywhere. We’re barely living on what we get now,” said Sendre James, a disabled Vietnam veteran who supports his son and two foster children in Los Angeles on $535 a month. James has been unable to receive any aid for the foster children.

Monica Valease Hamilton, a Los Angeles mother of three who has been living on welfare since a son was born three years ago with heart problems, said that if payments are reduced many families will cut back on food to try to keep their homes. Hungry children, she warned, often resort to desperate acts.

“If you’ve got a child whose mother can’t feed him, that child’s going to be stealing somebody’s purse because that child’s got to eat. The whole situation is just frightening. I pray to God it’s not my child who has to resort to stealing,” she said.

Advocacy groups said Wilson’s proposals seemed to be based on his belief in the old myths that welfare recipients are basically lazy, able-bodied adults who have chosen existence on the public dole as a lifetime occupation. Casey McKeever, directing attorney for the Western Center on Law & Poverty, said the state’s own statistics dispute those contentions, showing that most recipients have one or two children and stay on welfare less than two years.

“(Wilson) seems to blame poverty on welfare, and I think the reality is that welfare is the reflection of poverty,” he said.

Lenny Goldberg, executive director of the California Tax Reform Assn., said Wilson’s attack on welfare recipients has served to mask what he considers the real cause of many of government’s fiscal woes–namely, tax loopholes that have been granted large corporations and the wealthy.

Because of the way government is structured, he said, special interests can be granted a tax loophole through a simple majority vote of the Legislature, but tax reformers who want to close those loopholes need a two-thirds vote.

“It seems that from a fiscal standpoint, (Wilson) is trying to lay the burden of balancing the state budget on the backs of the very poor, and that’s not really where it belongs,” Goldberg said.

Hamilton, who acknowledged that the welfare system needs reform, said Wilson seems to be accepting a stereotypical view of poor people rather than trying to understand their plight.

“Poverty is 10 degrees below hell,” said Hamilton, who supports her family on a $788 monthly welfare payment. “If he’s been there, he can relate. But if he hasn’t been there, how can he dictate? He wants to sit up there and cut my check again, and I’m not even surviving on what I’ve got.”

Callie Hutchison, executive director of the California Homeless and Housing Coalition, criticized the governor’s proposal to limit the amount of welfare new residents can receive, noting that there is no “concrete evidence” that large numbers of people were moving to California because of the welfare benefits.

“People come for jobs and the much-touted California lifestyle,” she said. “They are attracted by their dreams for a better life, not how to live better in poverty.”

The WNBA and its players union will not agree to another extension of the collective bargaining agreement after the deadline passes Friday night, WNBPA vice president Breanna Stewart said.

That does not mean players will strike or the league will lock them out. Stewart told reporters Thursday at a practice for the Unrivaled three-on-three league that players would continue to negotiate in good faith.

With the deadline just before midnight Friday, the league wouldn’t confirm that the sides won’t reach an extension. A spokesman did say the league would “continue to negotiate in good faith with the goal of reaching a deal as quickly as possible.”

“Our focus remains on reaching an agreement that significantly increases player compensation while ensuring the long-term growth of the business,” a spokesperson said.

The league and the players had two previous extensions and met several times this week. Any stalled negotiations could delay the start of the season. The last CBA was announced in the middle of January 2020, a month after it had been agreed to.

It easily could take two months from when a new CBA is reached to get to the start of free agency, which was supposed to begin this month.

While a strike or lockout isn’t imminent, both sides could change their viewpoints.

Stewart said calling a strike is “not something that we’re going to do right this second, but we have that in our back pocket.” The league hasn’t been considering a lockout, according to a person familiar with the decision. The person spoke to the Associated Press on condition of anonymity because of the sensitive nature of the negotiations.

As of Thursday, the sides remained far apart on many key issues, including salary and revenue sharing, and it seems unlikely a deal could be reached before Friday’s deadline.

Revenue sharing a sticking point in talks

The league’s most recent offer last month would guarantee a maximum base salary of $1 million that could reach $1.3 million through revenue sharing. That’s up from the current $249,000 and could grow to nearly $2 million over the life of the agreement, a person with knowledge of the negotiations told AP. The person spoke on condition of anonymity because of the sensitive nature of the negotiations.

Under the proposal, players would receive in excess of 70% of net revenue — though that would be their take of the profits after expenses are paid. Those expenses would include upgraded facilities, charter flights, five-star hotels, medical services, security and arenas.

The average salary this year would be more than $530,000, up from its current $120,000, and grow to more than $770,000 over the life of the agreement. The minimum salary would grow from its current $67,000 to approximately $250,000 in the first year, the person told the AP.

The proposal also would pay young stars like Caitlin Clark, Angel Reese and Paige Bueckers, who are all still on their rookie contracts, nearly double the league minimum.

The union’s counter proposal to the league would give players around 30% of the gross revenue. The players’ percentage would be from money generated before expenses for the first year and teams would have a $10.5-million salary cap to sign players. Under the union’s proposal, the revenue sharing percent would go up slightly each year.

Union wants expansion fees included; league saying no

The union feels that the $750 million in expansion fees that the league just received with the addition of franchises in Cleveland, Detroit and Philadelphia by 2030 should be considered revenue and included in projections. The league says that the money actually goes to all the current teams to make up for the future money they’ll be losing by dividing the total revenue by more franchises.

Other major sports leagues like the NBA, NHL and NFL don’t include expansion fees in their revenue-sharing structures. Major League Baseball’s salary structure is not tied to its revenue, so expansion fees don’t matter.

League wants players to pay for own housing

With the potential new minimum salary at approximately $250,000, the WNBA has said that like most every other pro league, players should pay for their own housing.
The union’s stance is that teams should continue to pay for players’ housing.

Why stalled negotiations could delay the season

An extended delay in getting a deal done could cause a number of problems, specifically getting the season started on time or even played for several reasons. There are several factors that indicate that time is near:

• Free agency: With nearly all the veterans free agents this offseason, this will be the biggest year in the league’s history as far as potential movement. Free agency was supposed to start this month. However, once a new CBA is reached, it could take both parties two months to get free agency started.
• Revenue-generating events could be delayed: The release of the schedule has been delayed. In the past the league tried to get it out before the holidays so teams could sell tickets. With so many players potentially changing teams as free agents, new merchandise wouldn’t be able to be sold.
• Expansion draft: With Portland and Toronto entering the league this year, an expansion draft has to be held. Last year when Golden State came into the WNBA, a draft was held in December. Teams need to figure out who they will be protecting from being selected in the draft, and that is made more complicated because of all the free agents.

The fiery debate about a proposed ballot measure to tax California’s billionaires has sparked some soul-searching across the state.

While the idea of a one-time tax on more than 200 people has a long way to go before getting onto the ballot and would need to be passed by voters in November, the tempest around it captures the zeitgeist of angst and anger at the core of California. Silicon Valley is minting new millionaires while millions of the state’s residents face the loss of healthcare coverage and struggle with inflation.

Supporters of the proposed billionaire tax say it is one of the few ways the state can provide healthcare for its most vulnerable. Opponents warn it would squash the innovation that has made the state rich and prompt an exodus of wealthy entrepreneurs from the state.

The controversial measure is already creating fractures among powerful Democrats who enjoy tremendous sway in California. Progressive icon Sen. Bernie Sanders (I-Vt.) quickly endorsed the billionaire tax, while Gov. Gavin Newsom denounced it .

The Golden State’s rich residents say they are tired of feeling targeted. Their success has not only created unimaginable wealth but also jobs and better lives for Californians, they say, yet they feel they are being punished.

“California politics forces together some of the richest areas of America with some of the poorest, often separated by just a freeway,” said Thad Kousser, a political science professor at UC San Diego. “The impulse to force those with extreme wealth to share their riches is only natural, but often runs into the reality of our anti-tax traditions as well as modern concerns about stifling entrepreneurship or driving job creation out of the state.”

The state budget in California is already largely dependent on income taxes paid by its highest earners. Because of that, revenues are prone to volatility, hinging on capital gains from investments, bonuses to executives and windfalls from new stock offerings, and are notoriously difficult for the state to predict.

The tax proposal would cost the state’s richest residents about $100 billion if a majority of voters support it on the November ballot.

Supporters say the revenue is needed to backfill the massive federal funding cuts to healthcare that President Trump signed this summer. The California Budget & Policy Center estimates that as many as 3.4 million Californians could lose Medi-Cal coverage, rural hospitals could shutter and other healthcare services would be slashed unless a new funding source is found.

On social media, some wealthy Californians who oppose the wealth tax faced off against Democratic politicians and labor unions.

An increasing number of companies and investors have decided it isn’t worth the hassle to be in the state and are taking their companies and their homes to other states with lower taxes and less regulation.

“I promise you this will be the final straw,” Jessie Powell, co-founder of the Bay Area-based crypto exchange platform Kraken, wrote on X. “Billionaires will take with them all of their spending, hobbies, philanthropy and jobs.”

Proponents of the proposed tax were granted permission to start gathering signatures Dec. 26 by California Secretary of State Shirley Weber.

The proposal would impose a one-time tax of up to 5% on taxpayers and trusts with assets, such as businesses, art and intellectual property, valued at more than $1 billion. There are some exclusions, including property.

They could pay the levy over five years. Ninety percent of the revenue would fund healthcare programs and the remaining 10% would be spent on food assistance and education programs.

To qualify for the November ballot, proponents of the proposal, led by the Service Employees International Union-United Healthcare Workers West, must gather the signatures of nearly 875,000 registered voters and submit them to county elections officials by June 24.

The union, which represents more than 120,000 healthcare workers, patients and healthcare consumers, has committed to spending $14 million on the measure so far and plans to start collecting signatures soon, said Suzanne Jimenez, the labor group’s chief of staff.

Without new funding, the state is facing “a collapse of our healthcare system here in California,” she said.

Rep. Ro Khanna (D-Fremont) spoke out in support of the tax.

“It’s a matter of values,” he said on X. “We believe billionaires can pay a modest wealth tax so working-class Californians have the Medicaid.”

The Trump administration did not respond to requests for comment.

The debate has become a lightning rod for national thought leaders looking to target California’s policies or the ultra-rich.

On Tuesday, Sanders endorsed the billionaire tax proposal and said he plans to call for a nationwide version.

“This is a model that should be emulated throughout the country, which is why I will soon be introducing a national wealth tax on billionaires,” Sanders said on X. “We can and should respect innovation, entrepreneurship and risk-taking, but we cannot respect the extraordinary level of greed, arrogance and irresponsibility that is currently being displayed by much of the billionaire class.”

But there isn’t unanimous support for the proposal among Democrats.

Notably, Newsom has consistently opposed state-based wealth taxes. He reiterated his opposition when asked about the proposed billionaires’ tax in early December.

“You can’t isolate yourself from the 49 others,” Newsom said at the New York Times DealBook Summit. “We’re in a competitive environment. People have this simple luxury, particularly people of that status, they already have two or three homes outside the state. It’s a simple issue. You’ve got to be pragmatic about it.”

Newsom has opposed state-based wealth taxes throughout his tenure.

In 2022, he opposed a ballot measure that would have subsidized the electric vehicle market by raising taxes on Californians who earn more than $2 million annually. The measure failed at the ballot box, with strategists on both sides of the issue saying Newsom’s vocal opposition to the effort was a critical factor.

The following year, he opposed legislation by a fellow Democrat to tax assets exceeding $50 million at 1% annually and taxpayers with a net worth greater than $1 billion at 1.5% annually. The bill was shelved before the legislature could vote on it.

The latest effort is also being opposed by a political action committee called “Stop the Squeeze,” which was seeded by a $100,000 donation from venture capitalist and longtime Newsom ally Ron Conway. Conservative taxpayer rights groups such as the Howard Jarvis Taxpayers Assn. and state Republicans are expected to campaign against the proposal.

The chances of the ballot measure passing in November are uncertain, given the potential for enormous spending on the campaign — unlike statewide and other candidate races, there is no limit on the amount of money donors can contribute to support or oppose a ballot measure.

“The backers of this proposed initiative to tax California billionaires would have their work cut out for them,” said Kousser at UC San Diego. “Despite the state’s national reputation as ‘Scandinavia by the Sea,’ there remains a strong anti-tax impulse among voters who often reject tax increases and are loath to kill the state’s golden goose of tech entrepreneurship.”

Additionally, as Newsom eyes a presidential bid in 2028, political experts question how the governor will position himself — opposing raising taxes but also not wanting to be viewed as responsible for large-scale healthcare cuts that would harm the most vulnerable Californians.

“It wouldn’t be surprising if they qualify the initiative. There’s enough money and enough pent-up anger on the left to get this on the ballot,” said Dan Schnur, a political communications professor who teaches at USC, Pepperdine and UC Berkeley.

“What happens once it qualifies is anybody’s guess,” he said.

Lorena Gonzalez, president of the California Federation of Labor Unions, called Newsom’s position “an Achilles heel” that could irk primary voters in places like the Midwest who are focused on economic inequality, inflation, affordability and the growing wealth gap.

“I think it’s going to be really hard for him to take a position that we shouldn’t tax the billionaires,” said Gonzalez, whose labor umbrella group will consider whether to endorse the proposed tax next year.

California billionaires who are residents of the state as of Jan. 1 would be impacted by the ballot measure if it passes . Prominent business leaders announced moves that appeared to be a strategy to avoid the levy at the end of 2025. On Dec. 31, PayPal co-founder Peter Thiel announced that his firm had opened a new office in Miami, the same day venture capitalist David Sacks said he was opening an office in Austin.

Wealth taxes are not unprecedented in the U.S. and versions exist in Switzerland and Spain, said Brian Galle, a taxation expert and law professor at UC Berkeley.

In California, the tax offers an efficient and practical way to pay for healthcare services without disrupting the economy, he said.

“A 1% annual tax on billionaires for five years would have essentially no meaningful impact on their economic behavior,” Galle said. “We’re funding a way of avoiding a real economic disaster with something that has very tiny impact.”

Palo Alto-based venture capitalist Chamath Palihapitiya disagrees. Billionaires whose wealth is often locked in company stakes and not liquid could go bankrupt, Palihapitiya wrote on X.

The tax, he posted, “will kill entrepreneurship in California.”