Newsom's National Tax Plan
Gavin Newsom Proposes National Billionaire Tax, Opposing California's State Wealth Levy
California Gov. Gavin Newsom is pushing for a national tax on billionaires — while actively blocking one in his own state. On June 26, Newsom published a manifesto titled "An Economic Reset for America," calling for a federal minimum tax on anyone worth more than $100 million. At the same time, he rejected a state proposal that would hit California's roughly 200 to 250 billionaires with a one-time 5% wealth tax, according to CNN.
The move puts Newsom in a politically awkward spot. He is widely seen as a likely 2028 presidential candidate. His national proposal appeals to the populist left. But his opposition to the California tax has drawn sharp criticism from union leaders and progressive economists, according to AP News.
California's $100 Billion Healthcare Crisis Sparked the Fight
The clash traces back to Trump's "One Big Beautiful Bill," signed in July 2025. The law cut roughly $1 trillion from Medicaid and the Affordable Care Act over a decade. California faces a projected $100 billion healthcare funding gap over five years. Medi-Cal, the state's Medicaid program, covers one in three residents — about 15 million people, according to AP News.
The SEIU-UHW healthcare union proposed the "California Billionaire Tax Act" to plug that gap. Backers collected 1.6 million signatures — nearly double the 874,641 required. The measure was certified for the November ballot on June 17. The union offered a compromise on June 18: a smaller 2% tax in exchange for pulling the ballot measure. Newsom's office rejected the deal immediately, according to CNN.
Newsom Says State Taxes Drive Billionaires Away
Newsom argues that taxing wealth at the state level "makes no sense." His concern is capital flight — billionaires simply moving to another state to avoid the tax. California already lost significant income tax revenue after earlier tax increases pushed top earners out, he says. The state's top 1% of earners provide about 50% of its income tax revenue, according to AP News.
Critics pushed back hard. Gabriel Zucman, an economist at UC Berkeley and a key architect of the California proposal, said Newsom was protecting "Peter Thiel and Mark Zuckerberg at the expense of Californians' health." Zucman argued Newsom was validating "conservative talking points" about capital flight, according to CNN. A May 2026 poll by PPIC found 54% of likely voters support the billionaire tax.
Newsom's Four-Part National Plan Targets the Ultra-Wealthy
Newsom's "Economic Reset" has four main ideas. First, a federal minimum tax on anyone worth $100 million or more. Second, U.S. government equity stakes in major AI companies, creating a "Sovereign Wealth Fund" for workers displaced by automation. Third, new inheritance tax rules to stop what he calls a "permanent American aristocracy" forming from the $124 trillion generational wealth transfer. Fourth, raising corporate tax rates back to pre-2017 levels, according to AP News.
Newsom framed the agenda as urgent. He said elite concentration of wealth and power threatens democracy itself. CNN analysts described the national push as a "calculated presidential maneuver" — opposing the state tax to reassure moderate donors and Silicon Valley, while the national plan locks in his populist credentials for a 2028 primary run.
November Ballot Battle Could End in Legal Chaos
The California measure is now locked onto the November 3 ballot. The June 25 deadline to withdraw it passed with no deal. Proponents say the 5% one-time tax on net worth over $1 billion would raise $20 billion per year — about $100 billion over five years. Opponents at the California Taxpayers Association say it would actually cost the state $3.5 to $4.5 billion annually as billionaires flee, according to AP News.
Business groups have placed two rival measures on the same ballot. Those measures would require a two-thirds supermajority to pass any new wealth tax — potentially killing the 5% tax even if it wins a simple majority vote. Notably, the California Teachers Association and Planned Parenthood have joined the opposition, fearing the tax creates budget swings that could hurt school funding long-term, according to CNN.
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