Gov. Gavin Newsom has now gone past opposing California’s proposed billionaire tax. He wants the state barred from ever passing a wealth tax. CalMatters reported that on a Friday in early October he endorsed Proposition 42, a November ballot measure that would cancel out Proposition 40, the billionaire tax.
Prop. 40 would levy a one-time 5% tax on the assets of any billionaire who lived in California on Jan. 1, 2026. Prop. 42 would prohibit retroactive taxes like that one. It also goes further, banning new taxes on personal property, a category that covers pensions, 401(k) accounts before retirees draw income from them, other investments, financial assets, business holdings and art collections.
Billionaire and Google co-founder Sergey Brin funded Prop. 42 and put it on the ballot. Newsom’s support sets him against his own party and some labor unions, and lines him up with wealthy tech donors he has known since his days as mayor of San Francisco.
The argument for Prop. 42
“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,” Newsom said in a statement released by the proponents, who also include police and fire unions. Backers argue that middle-class pensions should never be taxed as assets and then taxed again as income. CalMatters noted that no such proposal exists. Past asset-tax bills died in the Legislature, any tax would need a two-thirds vote, and the billionaire tax already exempts many retirement accounts.
Union and left response
The billionaire tax is funded by one healthcare union and would send 90% of its revenue to Medi-Cal, the state program for low-income residents. Debru Carthan, a vice president of SEIU-United Healthcare Workers West, said Newsom is “showing California his true colors.” He added: “He’d rather millions of children and families lose their healthcare than ask a couple hundred billionaires to finally pay their fair share.”
Rep. Ro Khanna, a Democrat and another possible 2028 presidential contender, said donor relations were the “only reason” for Newsom’s stance. “You can’t be anti-Trump and then do the bidding of Trump donors,” he said in a video with Saikat Chakrabarti. Khanna pointed to Brin, who has never donated to Newsom but has known him for years. They attended each other’s weddings. The tech magnate has recently courted Trump’s favor.
A national tax instead
The California Democratic Party endorsed the billionaire tax, and polling shows a slim majority of likely voters support it. Newsom, who has opposed state-level asset taxes through his two terms for fear the wealthy will leave and take their income tax revenue with them, proposed a national alternative this summer. It includes a minimum tax rate on anyone worth more than $100 million, a rollback of the 2017 corporate tax cuts, higher inheritance taxes and an end to loopholes that let the rich borrow against unrealized gains without paying income tax.
Newsom also opposes Proposition 39, the voter ID measure, Proposition 43 on local taxes and Proposition 44 on clinic spending. His spokesperson, Izzy Gardon, said he has not taken a position on Prop. 41, another Brin-backed measure that would nullify Prop. 40 through spending limits and audits.
Sources
Sources
- See the latest updates, context, and perspectives about this story.
- Newsom backs ban on wealth taxes in California election – CalMatters
