Republican Steve Hilton pledged to make the first $150,000 of income tax-free for California workers, proposing a sweeping tax overhaul paired with aggressive government spending cuts as he races toward the November general election against Democrat Xavier Becerra.
Under Hilton’s plan, income above $150,000 would face a flat 8% tax rate, replacing California’s current progressive income tax system. The proposal aims to deliver immediate relief to middle-class and working-class Californians amid the state’s persistent affordability crisis.
Hilton’s campaign initiative, dubbed “Operation Zero Waste,” outlines how the state would fund the tax cuts through spending reductions. According to Hilton, California has a “waste problem, not a revenue problem,” citing the state’s current budget of more than $350 billion—nearly double what it was a decade ago.
Funding Through Spending Cuts
Hilton’s plan targets several major state expenditures. He proposes canceling California’s $126 billion high-speed rail project, which has consumed billions in spending despite entering only the track-laying phase this year. The plan also calls for defunding what Hilton describes as the “homeless industrial complex,” arguing that billions in taxpayer funds have enriched nonprofits without solving the state’s homelessness crisis.
Additional savings would come from implementing a 5% efficiency reduction across all state departments, reducing the state bureaucracy headcount by 10%—affecting approximately 25,000 of California’s 247,446 direct employees. Hilton also proposes using artificial intelligence to modernize state operations and implementing reforms to the state’s Medicaid program, citing concerns over fraud in hospice and home health agencies.
The proposal represents a stark contrast to his opponent’s approach. Xavier Becerra, the Democratic nominee, supports a progressive tax structure and has backed California’s proposed billionaire wealth tax—a one-time 5% levy on accumulated assets exceeding $1 billion, which economists estimate could generate $100 billion for healthcare and education programs.
Hilton advanced from the June 2026 primary with 25% of the vote and will face an uphill battle in California’s Democratic-leaning electorate. His affordability platform centers on lowering everyday costs for Californians, including proposals to reduce gas prices to $3 per gallon by expanding oil production and capping hidden taxes such as municipal impact fees on housing.
Sources
- New York Post — detailed reporting on Hilton’s “Operation Zero Waste” plan, spending cut targets, and high-speed rail cancellation proposal
- KESQ News — coverage of Hilton’s flat-tax plan unveiled in Huntington Beach, including the $150,000 exemption and 8% rate
- CalMatters — reporting on Becerra’s tax policy positions and the billionaire wealth tax proposal
- PPIC — polling data on voter support for Becerra and Hilton, and the billionaire wealth tax
- NBC News — confirmation of both candidates advancing to the November 2026 general election
