Newsom is eyeing the White House. He can’t be tied to the radical Left anymore.
And now Gavin Newsom broke with Democrats in a betrayal they never saw coming.
Governor Voices Concerns Over Economic Impact
California Governor Gavin Newsom has strongly criticized a ballot initiative that would impose a one-time 5% tax on the net worth of individuals with more than $1 billion in assets.
The measure, known as the 2026 Billionaire Tax Act and backed by the Service Employees International Union–United Healthcare Workers West, aims to generate revenue—potentially around $100 billion—to help offset federal cuts to health care and social services.
It would apply to California residents as of January 1, 2026, with payments possibly spread over five years.
Newsom, speaking in recent interviews, described the proposal as economically damaging.
In one with Politico, he said: “This is my fear… It’s just what I warned against. It’s happening. The impacts are very real — not just substantive economic impacts in terms of the revenue, but start-ups, the indirect impacts of … people questioning long term-commitments. That’s not what we need right now, at a time of so much uncertainty.”
He emphasized California’s competitive position among states: “That’s different. That’s very different… We live in a competitive reality with 49 other states.”
Newsom predicted the measure would fail if it reaches voters, stating to the New York Times: “This will be defeated — there’s no question in my mind.”
Behind-the-Scenes Efforts and Signs of Wealthy Exodus
Newsom has been working for months to block the initiative, including direct meetings with union leaders, and he has coordinated opposition from business groups.
Reports indicate that the mere prospect of the tax has prompted some billionaires, including Google co-founders Larry Page and Sergey Brin, as well as others like Peter Thiel, to relocate residences, move businesses, or shift assets out of state—actions Newsom cited as validating his warnings about capital flight and lost revenue.
Supporters of the tax argue it addresses urgent needs amid federal budget reductions that could lead to job losses and hospital closures in California. The initiative requires roughly 900,000 signatures to qualify for the November 2026 ballot.
Divided Reactions Within Democratic Circles
The proposal has created tensions among Democrats. While some progressive voices have criticized Newsom for siding against the tax—labeling him overly aligned with wealthy interests—others, including San Jose Mayor Matt Mahan, have backed his stance.
Mahan posted on X that the tax would backfire, forcing middle-class taxpayers to cover shortfalls, and praised Newsom’s position despite past policy differences.
Newsom has distinguished state-level taxes from potential national ones, suggesting a broader federal discussion might be worthwhile but that California cannot afford to act alone in this environment.
The debate underscores ongoing challenges in balancing progressive revenue goals with economic competitiveness in a high-tax state already facing budget pressures.
