Newsom pushes national wealth tax after opposing California billionaire tax
After spending months fighting a wealth tax in his state, a likely 2028 presidential contender says it’s time for an “economic reset” by way of a national tax on billionaires.
California Gov. Gavin Newsom says he wants to implement a national tax on the ultra-rich. That comes after he’s been vocally opposed to a wealth tax proposal in his own state.
Newsom proposal
“It’s time for an economic reset, a true minimum tax, a true minimum tax on billionaires that ensures the people at the very top pay at least the tax rate their own workers’ pay,” Newsom said.
Billionaires often pay very little in taxes because they have very little in income.
Most of their wealth is often tied to shares of major companies and, unless they sell those shares, there’s no income to report.
They can then borrow against that with no taxable income.
“A wealth tax would impose tax on the Bezos’ and other billionaires of America, regardless of how much they sold or hadn’t sold,” Brian Galle, a law professor at UC Berkeley, told Straight Arrow.
Newsom’s proposal calls for a minimum tax on anyone with a net worth of more than $100 million.
“Trickle-down economics, it’s been a nearly 50-year experiment that has failed,” Newsom said.
As part of his announcement, Newsom also floated rewriting the rules around inheritance.
He said the largest intergenerational wealth transfer in human history will take place over the next two decades and could “lock in a permanent American aristocracy of inherited wealth.”
The agricultural community has long opposed high inheritance taxes with lower threshold triggers because the value of land held in family farms over generations is often high, but the annual profit of the land is a fraction of that value.
CA wealth tax
This comes at the same time the governor doubled down on his opposition to a one-time tax on billionaires in California.
Writing on his Substack, Newsom shared concerns that the money raised from that tax would only go to helping to keep health care costs down and not to other sectors like education.
Billionaires in the state have spent a lot of money either fighting the proposal or just moving out altogether.
Despite that, the proposal is officially on the ballot for Californians to decide come November, which makes the timing of Newsom’s new announcement somewhat complex.
“[That] suggests maybe either some way to communicate some very complicated message to voters, or maybe some could argue trying to distract some voters from the fact that he was working so hard to defeat the California billionaire tax,” Galle said.
A majority of Californians, especially Democrats, support that proposal.
Political repercussions
Newsom has not officially announced a 2028 presidential run, but it’s widely expected.
Pushing back on a tax proposal that is very popular amongst progressives could be tough to explain in a Democratic primary.
“If you’re going to run in a Democratic primary, and your main recent policy accomplishment was defeating a policy that was wildly popular among Democrats, you probably would have to do something to shore up your base,” Galle said.
Polling does show most Americans believe billionaires should be paying more in taxes.
“We have two years of evidence now of what rule by billionaires looks like for the country, and it’s been pretty catastrophic,” Galle said.
Newsom does remain a top contender in 2028 presidential polling, but many Americans hold an unfavorable view of him.
The governor has recently made other populist moves in his own state as well.
Further complicating the situation is that Newsom has historically relied on billionaire money to get into office.
Running for president costs a lot of money, and it’s unclear how this proposal could impact his campaign coffers should he take a run at Washington.
Much like in California, billionaires are likely to push back against this.
“Billionaires understand, like most people do, that their billions are a way of ensuring political power, and they don’t want to see even a first small step towards reducing that political power,” Galle said.
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Ella Rae Greene, Editor In Chief
