“Today, the office worker can shoulder a higher tax rate than the heiress,” California Gov. Gavin Newsom wrote in a Substack essay published Friday, June 26. “The construction worker could pay a higher rate than the developer.”
His fix is federal. Newsom called for a “true minimum tax on billionaires, a modern Buffett Rule,” so the people at the very top pay at least the rate their own workers pay. He gave no specific rate, according to USA Today. The original Buffett Rule came from a plan by then-President Barack Obama for a 30% minimum on people earning over $1 million a year, which Senate Republicans blocked in April 2012.
What else is in the plan
Newsom wants to end the “tax-free lifestyle loan,” the practice of borrowing against stock holdings, reporting no taxable income and passing the appreciated assets to heirs untaxed. He also wants new inheritance rules ahead of a generational wealth transfer he put at $124 trillion over the next two decades, which he warned could produce “a permanent American aristocracy of inherited wealth.” The plan restores pre-2017 corporate tax rates and closes offshore loopholes.
The third piece is a national public equity fund holding a major stake in the AI economy. Revenue would pay for severance, portable benefits and better unemployment insurance for displaced workers. The broader program would fund universal child care, tuition-free higher education and career training, health care and an industrial policy for what he calls the “AI century.”
“When 10% of the people in this country own two-thirds of the wealth, when we have minted the first trillionaire in human history, and yet your wages have stagnated, and your healthcare costs have skyrocketed, something is fundamentally broken,” he wrote.
No at home
The essay landed while California argues over its own version. The union-backed Billionaire Tax Act, a one-time 5% tax on roughly 200 billionaires that would raise an estimated $100 billion, qualified for the November ballot earlier this month. Newsom said he will vote against it.
He has two main objections. Most of the money would go to health care, he said, and it “ignores our public schools,” women’s health clinics, housing and child care. And because the tax would apply only in California, wealthy residents could simply leave for states such as Texas and Florida. The fight, he argued, belongs at the federal level “where this broken system was created in the first place.” He added that the Legislature, not “a single stakeholder, no matter how worthy the cause,” should set the state budget.
The Los Angeles Times reported that Mark Zuckerberg, Larry Page and Sergey Brin are among the tech figures who have been buying homes in Florida.
Newsom is term-limited and leaves office in January 2027. CBS News described him as an early frontrunner for the 2028 Democratic nomination. A YouGov/Economist survey this month found 71% of Americans, including 77% of Democrats and 68% of Republicans, say AI is developing too fast.
Sources
- California Gov. Gavin Newsom proposes federal billionaire tax and AI "public equity" fund
- Newsom proposes federal billionaire tax amid fight over state measure
