Full Breakdown
California Governor Gavin Newsom Opposes State Billionaire Tax While Proposing a National Wealth Tax
6/28/2026, 8:57:50 AM
California’s Billionaire Tax Ballot Measure
A citizen-initiated proposal, the California Billionaire Tax Act, would impose a one-time 5 % levy on the assets of residents whose net worth exceeds $1 billion as of Jan. 1, 2026. Sponsored by Service Employees International Union-United Healthcare Workers West (SEIU-UHW), the measure earmarks 90 % of the projected $100 billion revenue for Medicaid and the remaining 10 % for education and food-assistance programs. It qualified for the Nov. 3 ballot after gathering roughly 1.6 million signatures, more than double the required threshold.
State vs. Federal Tax Proposals
Governor Gavin Newsom, a Democrat and potential 2028 presidential candidate, publicly opposed the state measure, arguing that a narrowly targeted, one-time tax would destabilize California’s budget and encourage wealth-flight. In a Substack post on June 26, Newsom called for a “national billionaire’s tax” that would apply a minimum tax to individuals with net worth over $100 million, close loopholes that allow borrowing against appreciated assets, and revise inheritance rules. He framed the federal approach as the only way to address systemic wealth concentration.
Key Players and Their Positions
- Gavin Newsom – Governor of California; opposes the state initiative, advocates a federal minimum tax.
- Dave Regan – President of SEIU-UHW; leads the campaign for the state measure and rejects any compromise.
- Sergey Brin, Peter Thiel, Chris Larsen – Tech billionaires who have contributed $80 million-plus to opposition committees and have relocated assets out of California.
- Ro Khanna – U.S. Representative (CA-Fremont); supports the state measure and criticizes Newsom’s federal proposal.
- Bernie Sanders – Independent U.S. Senator (VT); backs the California initiative and calls for broader wealth-tax legislation.
- California Medical Association, California Primary Care Association, California School Boards Association – Health-care and education groups opposing the state measure.
Revenue Estimates and Economic Stakes
Economists Brian Galle, David Gamage, Emmanuel Saez, and Darien Shanske estimate the initiative could raise about $100 billion, while a separate Stanford-Hoover team projects $40 billion and warns that capital flight could reduce state income-tax receipts by $24.7 billion. The Legislative Analyst’s Office predicts an initial influx of “tens of billions” followed by annual declines of “hundreds of millions” in personal-income tax revenue.
Official Statements
Newsom wrote that “wealth is movable, and it shops for the state with the lowest taxes,” and that the state tax “dedicates almost all of the revenue to a single category of state spending.” SEIU-UHW’s Regan declared the union “all in” and labeled opponents “totally out of touch.” A coalition of health-care, education and housing groups warned the measure would “make California’s biggest challenges worse” by eroding the tax base.
Criticism and Opposition
Critics argue the one-time levy lacks a sustainable funding path and could trigger a “race to the bottom” as high-earners relocate. The “Stop the Squeeze” coalition contended that the tax would worsen healthcare, education and infrastructure funding. Ro Khanna accused Newsom of “flip-flopping” and protecting the billionaire class.
Conflicting Reports & Gaps
Revenue projections differ sharply ($100 billion vs. $40 billion). Estimates of capital flight range from negligible to a projected $24.7 billion loss in tax revenue. No definitive data exist on how many of the roughly 200 California billionaires would actually relocate after the measure’s passage.
Verbatim Quotes
- “It’s time for an economic reset for America,” — Gavin Newsom, Governor of California
- “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.” — Gavin Newsom
- “If you’re opposed to this tax, you’re on the side of trickle-down economics,” — Ro Khanna, U.S. Representative (CA)
- “The dangerous wealth tax directly threatens vital funding for education and schools, healthcare and clinics, public safety, and infrastructure projects by making California’s revenue even more volatile,” — Coalition of California Medical Association, California Primary Care Association, California School Boards Association
- “all of the serious issues voters care about — healthcare, school funding, the cost of living — would get worse by this so-called ‘wealth tax.'” — Dan Newsom, spokesperson for Stop the Squeeze
What’s Next
California voters will decide on the billionaire tax in November. Simultaneously, Newsom’s national proposal is expected to shape his presidential platform and may prompt congressional debate on federal wealth-tax legislation. Competing ballot measures aimed at nullifying the state initiative have also qualified, setting up a multi-measure contest for voters.
