Newsom’s Uncomfortable Reality
California Gov. Gavin Newsom has spent years championing progressive policies and higher taxes on wealthy Americans. Now he finds himself in the awkward position of begging California voters to reject a tax aimed squarely at the state’s richest residents. The irony is hard to miss.
Newsom’s critics argue he is protecting the Silicon Valley billionaires who could bankroll a future presidential campaign. They may have a point. But on one issue, Newsom is almost certainly correct. A state-level billionaire tax is likely to accelerate the departure of wealthy investors, entrepreneurs, and employers who have already been leaving California for years.
Who Is Gavin Newsom?
Newsom is California’s Democratic governor and is widely viewed as a potential Democratic presidential candidate in 2028. Throughout his political career he has supported progressive economic policies, but he has also defended California’s dependence on high-income taxpayers. That puts him in a difficult position when activists demand taxes that could drive away the very people producing a significant share of the state’s revenue.
In a Substack post after the measure qualified for the November ballot, Newsom made his position unmistakable.
“Last night, it became certain that a wealth tax would be placed on the November ballot in California. I’m voting no.”
He added, “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.”
What Is the Billionaire Tax?
The California Billionaire Tax Act would impose a one time 5% tax on California residents whose net worth exceeded $1 billion on January 1, 2026. Approximately 200 people would be affected.
Supporters estimate the measure would raise roughly $100 billion. Ninety percent would be directed toward healthcare programs, with the remaining ten percent going to education and food assistance. Billionaires would be allowed to pay the tax over five years. The measure only needs a simple majority to pass.
The proposal reached the ballot after organizers collected enough petition signatures. It is sponsored by Billionaire Tax Now, a campaign funded by the Service Employees International Union United Healthcare Workers West, commonly known as SEIU-UHW.
Why Is Newsom Fighting It?
Newsom insists the problem is not taxing billionaires. It is doing so one state at a time.
“The fight to make the wealthiest Americans pay more in taxes is not one we should be fighting state by state. The fight belongs at the federal level.”
His opponents are less charitable. Progressive journalist David Sirota accused Newsom of protecting wealthy political benefactors, writing, “Gavin Newsom is trying to protect 250 prospective 2028 presidential donors, even if that means 3 million of his constituents are medically bankrupted.”
Whether Newsom is protecting donors or simply recognizing economic reality depends on one’s political perspective. What is difficult to dispute is that California has already seen prominent business leaders relocate.
The Billionaire Exodus
Newsom’s warning is not theoretical.
Tesla CEO Elon Musk has already moved out of California. Oracle founder Larry Ellison has taken steps indicating a reduced California presence. Google co-founder Larry Page reportedly moved several business entities to Florida before the proposed tax’s residency date. Sergey Brin reportedly relocated to Nevada as the proposal gained momentum.
Silicon Valley entrepreneur Allison Huynh believes the departures are only beginning.
She warned the proposal would trigger a “mass migration,” involving “not just the billionaires, but the people who are investing in new ideas, in new infrastructure, whether it’s AI, healthcare, tech, robotics.”
She compared California’s strategy to a failing restaurant.
“Instead of lowering the price, they increase the price. And then you go into the restaurant, and it’s like $50 for a bowl of really bad dumplings.”
Huynh argues that founders and investors will not simply pay the tax. They will relocate, taking companies, investment capital, and thousands of jobs with them.
Who Wants the Tax?
Sen. Bernie Sanders has enthusiastically endorsed the proposal, calling it “reasonable and necessary” during “a time of unprecedented and growing wealth consolidation and income inequality.”
He also declared, “Never before have so few people had so much wealth and so much power.”
California Congressman Ro Khanna has also joined the coalition supporting the measure.
SEIU-UHW, the healthcare workers union financing the campaign, argues California faces a healthcare funding crisis following federal Medicaid reductions. Union president Dave Regan warned, “We are facing literally a collapse of our healthcare system here in California.” The union says the tax is needed to prevent hospital closures and preserve healthcare services.
The campaign itself argues that “popular support is on our side,” despite opposition from wealthy Californians and Sacramento insiders.
Public policy professor Mark Peterson of UCLA believes the revenue “would make a huge difference” in offsetting healthcare funding losses, but only if the measure survives expected legal challenges and if billionaires do not move or shelter their assets beforehand.
Who Opposes It?
Beyond Newsom, the opposition includes many of California’s largest technology leaders and business organizations.
Google co-founder Sergey Brin has reportedly contributed more than $82 million toward efforts designed to stop or weaken the initiative. Ripple co-founder Chris Larsen launched a separate committee opposing the measure. Other major contributors include Eric Schmidt, John Doerr, Stewart Resnick, and venture capitalist Ron Conway. Collectively, opposition campaigns have raised well over $100 million.
Interestingly, opposition extends beyond billionaires. The California Teachers Association, Planned Parenthood Affiliates of California, the California Medical Association, and several healthcare organizations have also opposed the proposal, arguing it lacks a sustainable funding model and could create unintended consequences.
FAM Editor: We see this very clearly and cannot help but laugh.
Gavin Newsom is the classic political whore. His tax and spend philosophy take a back seat to his personal political ambitions, which, ironically, puts him on the right side for a change.
