California’s governor, Gavin Newsom, renewed his pledge this week to fight a controversial plan to tax billionaires in the state. The proposed ballot measure, which could go to voters in November, has gained public attention recently amid heavy criticism and threats from tech moguls to leave the state.
In interviews with Politico and the New York Times published on Monday, Newsom described his office’s efforts to kill the proposed billionaire tax and told the Times he would “do what I have to do to protect the state”. As a direct-to-voters ballot initiative, Newsom would not have the power to veto the tax if the proposal passed.
Newsom’s opposition to the ballot measure – which would levy a one-time 5% tax on any residents of the state worth more than $1bn – comes amid an uproar from some of California’s most prominent billionaires. The Google founders Sergey Brin and Larry Page have both moved assets out of state in recent months, while the Palantir founder Peter Thiel donated $3m in December to a political action committee lobbying against the tax.
In interviews this week, Newsom cited billionaires who are shifting away from the state – such as Page and Brin, with whom he has longstanding relationships – as proof that his concerns about the tax deterring industry were vindicated.
“This is my fear. It’s just what I warned against,” Newsom told Politico. “It’s happening.”
The proposed ballot measure, called the 2026 Billionaire Tax Act, still needs to reach the 900,000 signatures necessary to be put to the state’s voters, but is already shaping up to become a political flashpoint this year. It is being backed by the powerful Service Employees International Union (SEIU), which argues that the revenue from the tax would save the state’s healthcare system and fund public education programs.
Newsom and his office have repeatedly spoken out against the tax, including at a New York Times Dealbook Summit event last month, when he claimed it would isolate California from the rest of the country. Newsom told Politico on Monday that there has been a months-long “all hands” effort to stop the proposal that included him personally meeting with the SEIU president.
Lobby groups, such as the California Business Roundtable, whose committee received millions from Thiel, have also mobilized to oppose the ballot measure. They argue that the wealth tax would drive investments out of the state, a position that Newsom has echoed.
If passed, the proposal would give billionaires five years to pay off the tax. Merely the threat of its success has already spooked the state’s ultra-wealthy, however, as well as becoming a rallying point for the tech right. A private Signal chat of tech elites that includes Anduril founder Palmer Luckey and White House AI czar David Sacks has been filled with outrage over the proposal, the Wall Street Journal reported. The celebrity lawyer Alex Spiro, who represents Elon Musk and other high-profile businessmen, also wrote a letter last month to Newsom railing against the tax on behalf of his clients.
