California Governor Gavin Newsom’s backing of a national billionaire tax is facing criticism from fellow Democrats, including Representative Ro Khanna. Khanna supports a state-level version of the tax, which proposes a one-time 5% rate as decided by voters.
During a press conference on Friday, Khanna harshly critiqued Newsom for not advocating for the national tax plan while opposing the state’s proposal. He pointed out, “You can’t support a national policy and then deny a state-level effort because you’re worried about upsetting billionaires in California.”
Newsom is against the state tax proposal, fearing that it could push wealthy individuals to leave California, ultimately harming the state’s economy. He stated on Friday, “The battle to get the wealthiest Americans to contribute more should not be fought state by state.”
After a deadline passed on Thursday for negotiations to remove the tax from the ballot, Newsom instead suggested a national concept aimed at “democratizing” the economy.
These national policy initiatives are significant, particularly since Newsom is seen as a likely presidential candidate for 2028. Khanna shares similar ambitions, and their disagreement over tax policies could hint at future conflicts in a Democratic primary.
Dave Regan, the president of SEIU-United Health Care Workers West—backers of the state proposal—joined Khanna in arguing that Newsom’s fears of “capital flight” from state taxes are unfounded.
Khanna, aiming to establish progressive credentials for any presidential aspirations, labeled Newsom’s comments as misleading “propaganda.” He remarked, “What Governor Newsom proposed at the federal level isn’t really a wealth tax; it’s more about taxing loans against assets, a recommendation by the tech elite themselves to boost tax revenue.”
He stressed that the tax debate is pivotal for the Democratic Party’s future, accusing Newsom of siding with billionaires. “This is a crucial moment to decide which side you stand on: for the working class or aligned with our party’s donor base?” Khanna stated. “What unfolds in California will influence national policies on this issue.”
Political analysts suggest that Newsom’s actions show his effort to balance far-left voter appeal with maintaining relationships with wealthy tech investors, like Ron Conway. “This seems to be a strategic approach, especially with the ballot deadline looming,” noted USC political communication professor Dan Schnur. “While I support taxing billionaires, this situation is different.”
The proposed one-time tax measure could incur considerable campaign expenses, potentially totaling millions, influencing Newsom’s presidential aspirations amidst the state’s promise to challenge the policy.
Proponents of the tax argue it’s essential to counteract federal reductions in healthcare funding. “We believe that Californians will agree that the wealthiest among us can contribute a modest one-time 5% tax, ensuring millions can maintain stable health insurance,” Regan remarked.
