California Gov. Gavin Newsom is doubling down on his opposition to a proposed billionaire tax in his state. The stance has him at odds with more progressive Democrats in California and the country ahead of a potential presidential bid.
Billionaire Tax Act
The rift comes from the Billionaire Tax Act ballot proposition. The measure could end up in front of California voters in November and would impose a one-time tax on anybody in the state with a net worth of more than $1 billion. The tax differs from an income tax that takes a percentage of income made in that year in that it would require billionaires to attest to their total assets and then pay the state 5%.
The premise has led to several billionaires establishing residency in other states before the Jan. 1, 2026, deadline to be retroactively subject to the tax if it passes in November.
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High-profile billionaires in the state, including the founders of Google, have pushed back against that tax. Larry Page and Sergey Brin built their fortunes in Silicon Valley but decided to reduce their ties to the state over the potential tax.
Supporters of the tax have said the extra money would help save California’s health care system from collapsing.
As of now, the initiative has not reached the needed number of signatures to get on the ballot.
Newsom’s stance
In interviews with The New York Times and Politico, Newsom voiced his concerns over the potential tax.
He referenced the move of wealthy tech moguls out of the state as one of the downsides of the tax.
“This is my fear,” Newsom told Politico. “It’s just what I warned against. It’s happening.”
Newsom told the Times he’s been working behind the scenes against the proposal and would fight against it if it reaches the ballot.
“This will be defeated — there’s no question in my mind,” Newsom said.
Newsom has also reportedly met with Dave Regan, the leader of the union behind the measure.
What does it mean?
Newsom’s pushback against the tax proposal is the latest move that may pit him against the more liberal members of his party.
“There’s no question that this will put him at odds with folks on the progressive end of the Democratic Party spectrum,” Darry Sragow, a longtime California Democratic political strategist, told Straight Arrow News.
In a sign of the times, New York City just elected self-proclaimed Democratic Socialist Zohran Mamdani.
“His opposition to this is undoubtedly not going to play well with the far end of the progressive movement in the party, the folks who are enthralled with the new mayor of the city of New York, but that’s just the way it is,” Sragow said.
While Sragow acknowledges some Democrats won’t support Newsom on this move, he doesn’t necessarily believe this is tied to any kind of plan to make Newsom look more moderate before a potential 2028 presidential run.
“My guess is that what he’s doing here is less about his moving to the center to run for president than it is about the fact that this proposed ballot measure shines a light on a very critical problem in this country but is really not the way to go about solving that problem,” Sragow said.
The gap between the rich and the poor in the U.S. has continued to grow by every measure over the last several decades.
“What the ballot measure proposes to do is something that will inflame passions on both sides of the issue, but it really doesn’t get close to crafting a long-term solution to a huge problem,” Sragow said.
Polling shows the proposed tax does have support amongst Californians, but by very slim margins. Newsom has made it clear he is not a supporter.
“He is opposing this with less of an eye on what it means for a political campaign and much more of an eye on what it does to California,” Sragow said.
There is also no data on how the rest of the country feels about the proposal.
“The income inequality that is clearly part of living in this country today is as worse or worse in many other parts of the country,” Sragow said. “So, without any data, it’s tough for me to determine what political consequences he’s gonna face because of the way he’s handling this.”
