California Governor Gavin Newsom publicly opposed a one-time 5% state tax on residents with net worth over $1 billion, known as the California Billionaire Tax Act, on June 26. The measure, backed by the SEIU-UHW union, was certified for the ballot that day after receiving more than 1.55 million signatures from California voters [1].
Newsom said the state-level tax would be ineffective because wealthy individuals can transfer assets to other states to avoid the tax. "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 in a Substack post outlining his position [1].
Instead, Newsom proposed a national minimum tax on billionaires to target net worth over $100 million. His plan aims to close loopholes like "tax-free lifestyle loans" where billionaires borrow against their stock portfolios to avoid income taxes [1, 2, 3].
He also called for changes to federal inheritance tax rules to prevent what he described as "a permanent American aristocracy of inherited wealth," warning that without reform the ultra-wealthy would continue transferring assets tax-free across generations [3].
Newsom criticized the current tax system, noting, "Today, the office worker can shoulder a higher tax rate than the heiress. The construction worker could pay a higher rate than the developer. And the delivery driver can end up paying a higher rate than the founder of the company whose packages he delivers" [3].
Additionally, Newsom supports the U.S. government obtaining equity stakes in large artificial intelligence companies to ensure that Americans can share in AI-driven wealth [1, 3].
Newsom is considered a potential 2028 presidential candidate and framed his proposals as part of an economic reset for the country [1, 2, 3]. His comments followed the California state officials’ certification of the billionaire tax ballot measure on June 26.
The California Billionaire Tax Act, if passed, would impose a one-time 5% tax on net worth exceeding $1 billion [1]. Newsom’s national tax proposal targets a broader group, imposing minimum taxes starting at $100 million net worth [1, 2, 3].
