California voters will decide in the November elections whether to approve a tax on billionaires, an unprecedented proposal in the United States that seeks to allocate most of the resources to strengthening the public health system, The New York Times reported.

The initiative has sparked intense political and economic debate. While its promoters assure that it will allow hospitals and medical programs to be financed at a time of budget uncertainty, its detractors warn that it could cause large fortunes to leave the State and affect tax collection in the long term.

The issue has also divided the Democratic Party. Governor Gavin Newsom has already announced that he opposes the proposal, considering that it could put California's competitiveness as a center of innovation and technological development at risk.

How would the billionaire tax work?

The initiative, promoted by the SEIU-United Healthcare Workers West union, proposes applying a single 5% tax on the wealth of residents with wealth greater than $1.1 billion. Those who own between $1,000 and $1,100 million would pay a progressively lower rate.

If voters approve it, it would be the first tax of its kind in the United States, as it would tax assets such as stocks, trusts, works of art, jewelry and other assets, not just income.

Proponents estimate the measure could raise up to $100 billion over five years, of which 90% would go to health care programs, while the rest would fund education and food assistance.

“We are going to have a fair and necessary conversation about what kind of state we want and what kind of health system we want,” said Dave Regan, president of the union promoting the initiative.

Businessmen, billionaires and Newsom close ranks against the measure

The project faces strong resistance. In addition to Newsom, several California billionaires have funded alternative proposals that could invalidate the tax even if citizens approve it.

Among the main opponents is Google co-founder Sergey Brin, who, along with other businessmen, has supported campaigns to prevent new taxes on wealth and require audits of programs financed with those resources.

The opposition also includes medical and educational organizations and some unions, which fear that an exodus of large taxpayers will reduce state revenues for schools, infrastructure and public services.

Fiscal policy experts warn that, regardless of the result at the polls, the initiative could end up in court due to its unprecedented nature and the legal challenges that are already anticipated.

The vote is shaping up to be one of the most important consultations of the year in California and could set a national precedent on how to tax large fortunes to finance social programs.