Gavin Newsom’s Opposing position California’s proposed “billionaire tax lawExposing fissures within the Democratic Party, the former progressive governor is siding with wealth and implicitly opposing factions within the party that say billionaires shouldn’t even exist. It’s a momentous occasion for New York City Mayor Zohran Mamdani, who has forged a national profile with an unabashed “tax the rich” message, while Newsom, considered the frontrunner for the Democratic nomination for the 2028 presidential nomination, has made a clear stance against wealth taxes.
The fight centers on the Billionaires Tax Act of 2026, a ballot initiative that would impose a one-time 5% tax on any assets worth more than $1 billion in California. About 200 super-rich residents. Unlike an income tax, the measure would require billionaires to calculate their total wealth and write a big check to Sacramento if voters approve the measure in November.
Unions and health advocates backing the measure pledged tens of billions of dollars for schools, food assistance and health programs in a state with the highest inequality. Supporters see it as a one-time realignment of the social contract rather than an annual attack on the wealthy, and believe the political energy behind it could serve as a template for other blue states grappling with similar divisions between wealthy coastal enclaves and working-class communities.
Newsom breaks with left
Newsom responded with unusual bluntness, calling a wealth tax “bad economy” and warned that it was already driving billionaire exodus from California even before voters got involved. He publicly vowed that the initiative “will be defeated,” indicating he was prepared to oppose the initiative if it qualified for the ballot.
The stance puts him in direct conflict with powerful figures in his own party, including labor unions critical to his 2021 recall bid, as well as national progressives such as Sen. Bernie Sanders. recognized tax As a model for solving the problem of wealth concentration. The conflict could define Newsom’s final year as governor and shape his potential 2028 presidential bid, strategists say, forcing him to balance his relationship with tech donors against a growing base that views taxing billionaires as a litmus test for a politics of deep inequality.
Silicon Valley Anxiety and Escape Pods
The proposal sparked heated debate in Silicon Valley full panic Founders and investors worry this will accelerate Already visible migrations Capital and talent from California. High-profile figures including Google Co-founder Larry Page and Sergey Brin have taken action to reduce their ties or residence in the state before a Jan. 1, 2026 deadline that could result in them paying taxes retroactively if that deadline passes.
Business groups are driven by multi-million dollar contributions from tech billionaires, e.g. Peter Thielis pouring money into committees opposed to the measure and amplifying warnings that the tax would hollow out the state’s innovation hub and reduce long-term income tax revenue. Their argument gives Newsom political cover to frame his opposition as fiscal prudence rather than donor protection, even as critics say he risks entrenching California as a haven for the super-rich at the expense of public investment.
“Anti-Zoran”
The political contrast with New York City’s left-wing mayor, Zohran Mamdani, is stark. Mamdani publicly declared that “I don’t think we should have billionaires” and made increasing taxes on the rich a core of his platform, urging new taxes on millionaires and the most profitable businesses as a core “affordability agenda.”
While Mamdani has not supported a billionaire tax like California’s proposal, nor has he publicly commented on this particular ballot initiative, he advocated for it while campaigning 2% city income tax surcharge Those earning more than $1 million are targeted at about 34,000 high-income New Yorkers. New York Gov. Kathy Hochul, an increasingly close ally of Mamdani, has ruled out large-scale tax increases.
To be sure, Mamdani is showing signs that his politics will not be as radical in practice as they were in the campaign. Notable for his November White House visit with President Donald Trump Shocked left and rightbecause these two seemingly opposite characters basically get along well, and have reportedly been texting each other ever since..
one side split down the middle
The battle in California is emblematic of a broader debate among Democrats over whether tackling inequality requires directly taxing accumulated wealth or prioritizing incentives for growth and investment. On one side are unions, Sanders-like progressives and Mamdani-like officials who view billionaire wealth as a moral scandal and an untapped revenue stream; on the other are pro-business Democrats like Newsom who worry that aggressive wealth taxes will be economically and politically counterproductive.
As signatures are collected and money pours in from both sides, the Billionaire Tax Act is no longer a state-level conflict; It’s shaping up to be a proxy battle over the future of Democratic economic policy in the post-Biden era. For Newsom, the gamble is clear: Staking his national ambitions on the possibility that Democrats skeptical of billionaires will still accept a nominee who repeals the billionaire tax in their state.
The Importance of Wealthy Donors
Wealth and political power have concentrated dramatically at the top over the past few decades, with political donations from the nation’s 100 richest Americans surging more than 100-fold since 2000, far outpacing rising campaign costs. Court decisions, such as the 2010 Citizens United ruling and the growth of super PACs, enable billionaires to spend hundreds of millions of dollars each cycle, often to influence primaries, underwrite issue campaigns, and Republicans increasingly support Donald Trump 2024 and beyond.
Newsom has long been a favorite of wealthy donors, backed by some of San Francisco’s elite families — including offshoots of the Gettys, Pritzkers and Fishers — who have collectively provided tens of millions of dollars to his campaign over more than two decades. Newsom also draws high-profile support from billionaires in 2021 recall fight Netflix Co-Founder Reed Hastings and Agribusiness Stewart and Linda Resnick.
If Newsom were to run for president, many of these billionaires — especially Hastings and members of the Getty and Pritzker families — would be natural early financiers because they have long supported Newsom’s rise and are aligned with his pro-business, socially liberal brand of Democratic politics. More broadly, Newsom’s ties to California’s tech community and donor class, including figures such as former Google CEO Erik Schmidt, who backed him in state races, allow him to tap into a West Coast network of mega-donors that has increasingly become a financial backbone for Democrats in national campaigns.
For this story, wealth Journalists use generative AI as a research tool. Editors verified information for accuracy before publishing.