Newsom Backs National Billionaire Tax as California Ballot Measure Moves Forward
California Governor Gavin Newsom on Friday proposed a national minimum tax on billionaires and a public equity fund that would give Americans a stake in artificial intelligence companies, even as he continues to oppose a similar state-level wealth tax heading to the November ballot.
Newsom, widely seen as a potential 2028 presidential candidate, laid out his vision in a lengthy Substack post and video, arguing that a nationwide approach would prevent wealthy individuals from fleeing to low-tax states like Florida or Texas. The California governor described the current system as "fundamentally broken" and warned that "democracy itself starts to buckle" under the weight of extreme wealth concentration.
His proposal comes one day after California Secretary of State Shirley Weber certified 14 ballot measures for the November election, including the California Billionaire Tax Act, which would impose a one-time 5% tax on residents with a net worth exceeding $1.1 billion. The initiative, brought by the healthcare workers union SEIU-UHW, collected over 1.6 million signatures — among the highest in state history.
Why It Matters: A Clash of Visions and Vulnerable Revenue
The dueling proposals underscore a deepening divide within the Democratic Party over how to address inequality. While the party's base increasingly demands action to close the wealth gap, centrist governors like Newsom warn that state-level taxes could backfire by driving billionaires — and their tax dollars — out of California.
A coalition of unions, including the California Medical Association and the California School Boards Association, joined Newsom in opposing the state measure, arguing that dedicating 90% of revenue to healthcare would create "dangerous" volatility in state finances. "The dangerous wealth tax directly threatens vital funding for education and schools, healthcare and clinics, public safety, and infrastructure projects," the groups said in a joint statement.
Google co-founders Sergey Brin and Larry Page have either threatened to leave or already moved out of California, citing the proposed tax. Opponents of the billionaire tax have gathered enough signatures for two so-called "poison pill" measures designed to invalidate the wealth tax if it passes — one would ban taxes targeting financial assets or personal property, and another would require new tax revenues to stay within California's spending limit.
Supporters, including billionaire activist Tom Steyer and U.S. Representative Ro Khanna — both potential presidential contenders in their own right — have argued that the tax is both popular and necessary. Polling suggests wide public support for taxing the ultra-wealthy, even as economists debate whether such levies ultimately raise net revenue.
The National Strategy: Minimum Tax and AI Equity Fund
Newsom's national alternative would require billionaires and individuals with net worth of at least $100 million to pay a minimum tax rate. A second component would create a national public equity fund allowing Americans to own shares in artificial intelligence companies, framing it as compensation for jobs lost to automation.
"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," Newsom wrote, explaining his opposition to a state-only solution.
Critics note that Newsom's plan faces immense political hurdles in a divided Congress, where even modest tax increases on the wealthy have stalled repeatedly. Supporters, however, see it as a starting point for a national conversation.
Perspective: A Defining Issue for the 2028 Race
The wealth tax debate is likely to dominate California's November election and could reshape the Democratic primary for president in 2028. With 14 measures on the ballot alongside competitive races for governor and other statewide offices, campaigns are expected to be expensive and highly visible.
Former U.S. Health Secretary Xavier Becerra, the leading candidate to succeed Newsom as governor, also opposes the California billionaire tax, aligning with the outgoing governor. But with progressive candidates like Ro Khanna and Tom Steyer backing it, the measure has become a proxy fight over the party's direction.
Nationally, the wealth gap continues to widen. The top 10% of Americans now own two-thirds of the country's wealth, and the world minted its first trillionaire in 2025. Meanwhile, average wages have stagnated and healthcare costs have skyrocketed, fueling populist anger on both the left and right.
"When 10% of the people in this country own two-thirds of the wealth, when we have minted the first trillionaire in human history, and yet your wages have stagnated, and your healthcare costs have skyrocketed, something is fundamentally broken," Newsom wrote.
The California ballot fight also highlights the growing power of labor unions to force referendums on tax policy. SEIU-UHW, which spearheaded the initiative, has vowed to spend heavily to defend it against well-funded opposition from Silicon Valley billionaires.
As the November election approaches, voters will be watching closely — not just in California, but across a country grappling with how to tax its richest citizens. Whether Newsom's national vision gains traction or remains a aspirational proposal will depend on both the California outcome and the broader political climate heading into 2028.
Meanwhile, the debate over billionaires and their tax obligations is only likely to intensify, especially as artificial intelligence continues to reshape industries and concentrate wealth in new ways.
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