Newsom Calls for National Billionaire Tax While Opposing State Measure

California Gov. Gavin Newsom proposed a national minimum tax on individuals with net worth above $100 million and the creation of a public equity fund that would give Americans a stake in AI-generated gains. The announcement came one day after a separate state ballot measure qualified for the November election.

That measure would impose a one-time 5% wealth tax on California residents with net worth above $1 billion and is estimated to raise $100 billion from roughly 200 billionaires.

State officials said the measure qualified earlier in June after the union behind it gathered more than 1.5 million signatures, exceeding the 874,641 required. The proposal dedicates nearly all revenue to offsetting federal healthcare spending cuts. Newsom has opposed the state measure. He argued that wealth is movable and that a state-only tax would incentivize wealthy residents to relocate.

Newsom stated that the fight belongs at the federal level. He also recommended closing federal tax-code loopholes that allow borrowing against stock portfolios without reporting taxable income and passing appreciated assets tax-free to heirs.

“The fight to make the wealthiest Americans pay more in taxes is not one we should be fighting state by state." — Gavin Newsom, June 27 Congressman Ro Khanna criticized Newsom for supporting a national tax while opposing the state version. Khanna said the governor's announcement is misleading and accused him of avoiding a fight in his own state. Dave Regan, president of the SEIU-United Healthcare Workers West, the union behind the state proposal, said there will not be capital flight from the state tax. He argued that Californians are ready to support a modest one-time tax on the wealthiest residents. Democratic gubernatorial nominee Xavier Becerra said the initiative represents sketchy policy. Democratic Reps. Zoe Lofgren and Sam Liccardo and San Francisco Mayor Daniel Lurie also expressed opposition, citing risks of residents leaving the state. Newsom wrote that 10% of Americans own two-thirds of the wealth and that current inheritance rules risk creating a permanent American aristocracy. He called for returning to pre-2017 federal corporate tax rates.”