Newsom Criticizes Proposed California Wealth Tax
California Governor Gavin Newsom has expressed strong opposition to the state’s suggested wealth tax, warning it could undermine local economies. Meanwhile, some progressive allies have criticized him, alleging he’s become a “billionaire errand boy.”
In a recent interview, Newsom pointed to the flight of wealthy individuals from California due to the proposed “billionaire tax” as evidence of its potential negative impact. “This is my fear,” he told Politico, referencing those who have left the state to escape high tax rates.
“It’s happening—exactly what I warned you about,” he continued, elaborating on how this shift affects both immediate revenue and longer-term business prospects. “The impact is very real, including the indirect effects on startups and the confidence of people in their long-term commitments,” he added, emphasizing the uncertainty surrounding the issue.
Newsom, typically aligned with progressive ideals and contemplating a presidential run in 2028, suggested a broader national dialogue on wealth taxes rather than addressing it at the state level. “It’s different. It’s very different,” he stated, recognizing California’s competitive landscape with other states.
The proposed Billionaire Tax Act of 2026 seeks to apply a one-time 5% tax on personal wealth exceeding $1 billion and is being championed by state unions to offset anticipated federal funding cuts for social services and healthcare. If enough support is garnered via petition, Californians may vote on the tax in November. The idea of such a tax has spurred concern among wealthy Californians, leading many, including high-profile figures like Google co-founder Larry Page, to rapidly relocate or invest in out-of-state properties.
However, Newsom’s stance has raised eyebrows among some left-leaning figures. Civil rights attorney Alejandra Caraballo voiced her disapproval on social media, calling him a “billionaire’s errand boy.” Similarly, Jonathan Cohn from Progressive Mass criticized Newsom for potentially steering the Democratic Party toward a reliance on well-off donors.
Despite the pushback, Newsom predicted the tax proposal’s failure, telling The New York Times, “There’s no doubt in my mind.” Interestingly, he has found an unexpected ally in San Jose Mayor Matt Mahan, a fellow Democrat who typically has divergent views. Mahan warned that such a wealth tax could have serious ramifications for middle-class taxpayers and called for a focus on reforming federal tax loopholes instead.
Newsom noted he had been engaging with labor leaders to reconsider backing the proposal, recalling numerous discussions where concerns about California’s direct democracy surfaced. An unnamed participant, who had previously funded a failed recall attempt against him, raised issues that seemed contradictory to their earlier support for direct democracy.
