SouthernWorldwide.com – California Governor Gavin Newsom is urging voters to reject a proposed wealth tax on billionaires, a measure he fears will exacerbate the state’s ongoing exodus of wealthy individuals and businesses.
The initiative, officially added to the November ballot by its sponsor, Billionaire Tax Now, is known as the California Billionaire Tax Act. It aims to impose a one-time, “emergency” 5% tax on Californians with assets exceeding $1 billion.
This proposal has garnered support from figures like Senator Bernie Sanders, who described it as “reasonable and necessary” given the current levels of wealth consolidation and income inequality.
However, Governor Newsom has strongly voiced his opposition. He has expressed concerns that billionaires will simply relocate to states with lower tax burdens, such as Texas or Florida.
In a detailed post on his Substack, Newsom stated, “Last night, it became certain that a wealth tax would be placed on the November ballot in California. I’m voting no.”
He further elaborated on the mobility of wealth, writing, “You may not be able to pick up and move to Texas or Florida to shelter your income from taxation, but I promise you that billionaires can, and do. Wealth is movable, and it shops for the state with the lowest taxes.”
California has already seen prominent business leaders like Elon Musk, Larry Page, and Larry Ellison depart. Newsom’s concerns are echoed by others who believe the billionaire tax could worsen this trend.
One critic, Huynh, drew a parallel to a struggling restaurant. “Instead of lowering the price, they increase the price,” she said. “And then you go into the restaurant, and it’s like $50 for a bowl of really bad dumplings.”
Following the news of the ballot measure, Newsom pivoted, calling for a national wealth tax on billionaires and a “new social contract” for the United States.
He articulated on X (formerly Twitter) that “the system is fundamentally broken. The federal tax code, a corporate code, and an inheritance code were written for a different set of Americans. It’s time for an economic reset.”
In his Substack post, Newsom argued that the effort to increase taxes on the wealthiest Americans should not be a state-by-state battle. He believes the fight belongs at the federal level, where the current tax system was established.
Earlier this year, Newsom felt his opposition was validated by reports of wealthy Californians moving assets and businesses out of the state. He warned that the proposed tax would harm the economy and deter investment.
“This is my fear,” Newsom told Politico. “It’s just what I warned against. It’s happening.”
He continued, “The evidence is in. The impacts are very real — not just substantive economic impacts in terms of the revenue, but start-ups, the indirect impacts of … people questioning long-term commitments, medium-term commitments. That’s not what we need right now, at a time of so much uncertainty. Quite the contrary.”
Despite Newsom’s stance, the group behind the tax initiative, Billionaire Tax Now, sponsored by the Service Employees International Union – United Healthcare Workers West, moved forward with placing it on the ballot.
The union contends that the tax is necessary to “prevent the collapse of California healthcare and help fund California public K-14 education and state food assistance programs.”
Billionaire Tax Now expressed confidence in the measure’s success. They posted on X, “while a few controversial billionaires and their buddies in Sacramento want to see California’s hospitals close and tax breaks for billionaires protected – popular support is on our side.”
Conversely, some critics suggest Newsom’s opposition is motivated by a desire to secure potential presidential donors.
Billionaire Tax Now shared an X post from David Sirota, founder of The Lever, who claimed, “Gavin Newsom is trying to protect 250 prospective 2028 presidential donors, even if that means 3 million of his constituents are medically bankrupted.”
