It ‘Makes No Sense,’ California Gov. Gavin Newsom Says Of 5% Billionaire Tax As Backers Chase 900K Signatures — Predicting ‘Overwhelming Opposition’
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A proposed 5% wealth tax on billionaires is facing resistance as supporters push it toward the ballot.
California Gov. Gavin Newsom said a union-backed proposal for a one-time 5% wealth tax “makes no sense,” telling Politico recently that the measure reflects concerns he has raised before. Supporters are chasing roughly 900,000 signatures to qualify it for the ballot.
“This is my fear,” Newsom said. “It’s just what I warned against. It’s happening.”
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The proposal would apply to individuals with net worths above $1 billion and would be assessed retroactively on billionaires living in California as of Jan. 1. If approved by voters in November, it could result in large one-time tax bills.
Capital Flight Concerns
Newsom said the structure of the proposal creates incentives for capital to move out of the state, making revenue less predictable and enforcement more difficult.
Newsom told Politico many forms of wealth, including private investments and business holdings, do not have clear market values and are often spread across multiple states or countries, complicating efforts to tax assets rather than income.
“The evidence is in,” Newsom said. “The impacts are very real — not just substantive economic impacts in terms of the revenue, but start-ups and the indirect impacts of people questioning long-term commitments.”
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Union Pushes For Ballot Access
The billionaire wealth tax proposal is being led by the Service Employees International Union–United Healthcare Workers West, the union backing the measure to address budget pressures and protect funding for healthcare, education, and nutrition programs.
Supporters say the one-time tax would apply only to about 200 billionaires and would not raise taxes on the middle class, homeowners, or small businesses. They also say it is unlikely to push billionaires to leave California.
Divisions Within The Party
The proposal has exposed divisions among Democrats. Progressive lawmakers and labor groups support the measure, while moderate Democrats, including Newsom, have raised concerns about economic and political risks.
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Newsom told Politico he has spent months privately urging the union backing the proposal to abandon it. He said a national discussion about wealth taxes could be worthwhile but drew a clear distinction between federal and state action.
“That’s different,” Newsom said. “We live in a competitive reality with 49 other states.”
Looking Ahead
In his final year as governor, Newsom said the billionaire wealth tax proposal is not how he intended to spend his remaining time in office. He recently raised more than $100 million for a separate redistricting ballot measure and said he does not welcome another costly statewide campaign.
Newsom said he expects voters to reject the billionaire tax if it reaches the ballot.
“The good news is the overwhelming opposition to this by others,” he said. “I think it will be defeated, because I think people understand what it does versus what it promotes to do.”
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