In first open letter to billionaires, experts dismiss claims that billionaires could face inflated effective tax rates on voting shares in publicly traded companies
LOS ANGELES, CA – As support grows across California for a ballot measure that would prevent hospital and ER closures through a one-time tax on billionaires, the authors of the initiative are setting the record straight.
In an open letter to billionaires, titled “Open Letter to Billionaires re: Valuation of Control Shares,” penned by Brian Galle, Professor of Law at UC Berkeley, David Gamage, Law School Foundation Distinguished Professor of Tax Law & Policy at the University of Missouri School of Law, and Darien Shanske, Professor of Law at UC Davis, three authors of the ballot measure make clear the stipulations of the proposal.
Opponents have claimed that some super-voting shares will be taxed at a value much greater than their actual value, resulting in effective tax rates of 50% or more, rather than the 5% one-time tax the billionaire tax provides for.
Those claims are false. Under the Billionaire Tax, billionaires will not be taxed on more than the actual market value of their holdings. Publicly traded assets are valued at their fair market value on the valuation date. Non-publicly traded assets can be valued either based on a formula or by an appraisal based on fair market value, at the taxpayer’s option. The professors hope this clarification will set the record straight and drive attention to what’s truly at stake: local hospitals and emergency rooms that could be forced to shut their doors permanently if voters do not pass the measure in November.
“Opponents are distorting how this proposal actually works. The California Billionaire Tax is carefully structured to assess extraordinary wealth with as accurate valuations as is possible, not to single out or penalize people based on ‘voting’ or ‘control’ shares,” said Professor David Gamage, The Law School Foundation Distinguished Professor of Tax Law & Policy at the University of Missouri. “Claims that people with voting shares would somehow pay more than the intended tax simply misread the proposal and distract from the core issue: calling on the wealthiest Californians to contribute fairly to sustain the public services and healthcare systems that millions rely on.”
In November, California voters will at last have a chance to make billionaires pay their fair share to help prevent local hospitals and emergency rooms from being forced to shut their doors permanently, through a commonsense ballot initiative that places a one-time 5% tax on the wealth of approximately 200 billionaires who reside in the Golden State. Ninety percent of funds raised by the Billionaire Tax will go towards stabilizing California’s healthcare system and protecting healthcare for all Californians, and 10% will fund food aid and support K-14 public education.
More About the California Billionaire Tax Act
The commonsense measure is a direct response to the federal healthcare cuts that were included in HR1. Without this measure, higher healthcare costs will be shifted onto millions of Californians, many of whom are already struggling with skyrocketing healthcare and prescription costs.
Tax experts have underscored that what makes the billionaire tax unique is how it’s designed to be fair and enforceable — so billionaires who are California residents on January 1, 2026 can’t avoid responsibility by moving their assets or claiming residency elsewhere.
| Paid for by Save California Health Care and Public Education, Sponsored by Service Employees International Union – United Healthcare Workers West. Committee’s Top Funder Service Employees International Union – United Healthcare Workers West |
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