Gov. Gavin Newsom backs Proposition 42 to block California’s billionaire tax

California Governor Gavin Newsom (D) announced his support for Proposition 42, a ballot measure that would prohibit retroactive taxes imposed by Proposition 40, the so-called Billionaire Tax Act. The measure would also bar new taxes on personal property such as pensions, 401(k) accounts and other investments before retirees draw income. The initiative is being funded by Google co-founder Sergey Brin, who seeks to defeat the one-time 5 percent tax on California billionaires slated for implementation on Jan. 1 2026.

The Hill

Proposition 40, approved earlier, would levy a 5 percent tax on the net worth of billionaires residing in California and earmark 90 percent of the revenue for health-care programs and 10 percent for food-assistance or education initiatives. Critics argue the tax could drive high-wealth individuals out of the state, especially from Silicon Valley. Supporters, including Rep. Ro Khanna (D-CA) and Sen. Bernie Sanders (I-VT), contend the tax is a step toward addressing concentrated wealth nationally.

The Hill

Newsom’s statement, obtained by the measure’s proponents, emphasized protecting retirees’ savings: “We all agree that Californians deserve to have their retirement and life savings protected from new state taxes so those savings are there when they need them,” — California Gov. Gavin Newsom. The Service Employees International Union United Healthcare Workers West (SEIU-UHW) has publicly backed Proposition 42, citing concerns over new state taxes on retirement assets.

The Hill

• “We all agree that Californians deserve to have their retirement and life savings protected from new state taxes so those savings are there when they need them.” — California Gov. Gavin Newsom

The Hill