Rich Flee Threat Spurs Newsom’s U-Turn

Gavin Newsom is attacking a California billionaire tax at home while pitching a national version that would hit the rich harder.

Quick Take

Newsom wants a national tax on billionaires and people worth more than $100 million.
He says California should not rely on one state to chase wealthy residents away.
His office argues the state plan would cut revenue over time, even if it raises money fast.
The fight has split Democrats, unions, and other liberal groups in California.

Newsom’s New National Pitch

California Gov. Gavin Newsom called for a national “billionaires’ tax” while opposing a California ballot measure that would tax billionaire wealth once. Newsom said the federal government should set a “true minimum tax” on people with net worth above $100 million, and he compared the idea to a modern Buffett rule. He also said the tax should stop wealthy people from borrowing against stock holdings tax free.^[1]^[2]

Newsom framed the plan as a way to avoid the state-by-state race that lets wealthy residents move when taxes rise. He said California should not carry the burden alone if other states and the federal government do nothing. Supporters of the California measure say the money would help cover health care and other public needs after federal cuts, but Newsom says the state version is the wrong tool for the job.^[2]^[5]

Why He Opposes the California Measure

Newsom argues the California proposal would bring in a one-time windfall but hurt the state later. The Legislative Analyst’s Office said the measure would likely reduce state income tax revenue by hundreds of millions of dollars each year if wealthy residents leave.^[20] Newsom has long opposed state-level wealth taxes, saying they would weaken California’s position as a top economy and push investment out of the state.^[4]^[5]

That warning has become the core argument from opponents. They say a one-time tax cannot solve a long-term budget problem, especially if the rich who pay the most also pay the most income tax. The ballot plan would tax California residents with net worth above $1 billion, and much of the money would go to health care, with smaller shares for education and food assistance.^[20]^[21]

Democrats Are Split Over the Tax Fight

The debate has exposed a deep split inside California’s Democratic coalition. Reports say Planned Parenthood affiliates, the California Teachers Association, hospital groups, and some Democratic donors have raised concerns about the measure’s effect on investment and growth.^[3]^[8] Supporters still argue the tax could raise tens of billions of dollars, and they say that money is needed to offset federal health care cuts and protect services.^[6]^[7]

Gavin Newsom:
Tax the billionaires

Also Gavin Newsom:
($30 million net worth)
Don't tax the millionaires

— The_Veterans_Den (@BaneDaRaider) June 26, 2026

That split matters politically because Newsom is widely seen as a possible 2028 presidential contender. His stand lets him sound tough on wealth taxes while also keeping him aligned with business and fiscal warnings about capital flight. For conservatives, the larger lesson is simple: even some Democrats now admit that punishing wealth at the state level can drive taxpayers away and damage the base that funds government.^[4]^[6]^[8]