California Gov. Gavin Newsom on Friday proposed a national tax on billionaires that he says is the first part of an “economic reset for America” agenda, escalating his push for wealth redistribution after failing to block a state-level billionaire tax.
Newsom unveiled his plan in a Substack post, calling for a minimum tax on anyone worth more than $100 million so they pay at least the same rate as average American workers. The proposal comes as his aides explicitly say it’s part of his consideration of a presidential run, according to CNN.
The timing underscores a political pivot. Just one day earlier, a California ballot measure imposing a one-time 5% wealth tax on the state’s billionaires officially qualified for the November election, despite Newsom’s intense pressure campaign to block it. Rather than accept defeat on the state level, Newsom is now reframing the debate as a national issue.
“Wealth is movable, and it shops for the state with the lowest taxes,” Newsom writes in his proposal, according to Politico. “The fight belongs at the federal level, where this broken system was created in the first place.”
Newsom’s national plan includes several components beyond the minimum billionaire tax. According to Politico, it calls for a “modern Buffett rule” ensuring top earners don’t pay lower rates than their workers, ending the loophole that allows the wealthy to borrow against appreciated assets tax-free, revamping inheritance rules, closing offshore loopholes, and returning corporate tax rates to pre-2017 levels before President Donald Trump’s tax cuts.
He pairs the tax increases with a proposal for a national public equity fund that would give every American a stake in wealth generated by artificial intelligence companies. According to NBC News, the fund would cover worker transition benefits, universal childcare, free higher education and career training, healthcare, and a national industrial strategy for AI.
Newsom argues that without federal action, the largest intergenerational wealth transfer in human history over the next 20 years could lock in an “aristocracy of inherited wealth,” according to CNN. He also frames the proposal as a response to how AI will reshape the economy, saying Americans should own a share of that wealth rather than only tech investors.
Wealth tax proposals have a recent history in Democratic politics. Massachusetts Sen. Elizabeth Warren proposed a federal wealth tax during her 2020 presidential campaign, which would have imposed a 2% annual tax on fortunes exceeding $50 million. That proposal gained traction among progressives but never advanced legislatively.
The California ballot measure Newsom opposed would be the first state-level billionaire tax in the nation. Supporters, including Vermont Sen. Bernie Sanders and California Rep. Ro Khanna, gathered over 870,000 signatures and argue the revenue is needed to backfill federal healthcare cuts. Newsom’s objections center on the measure directing roughly 90% of revenue to offset federal health care costs rather than funding schools, housing, childcare, or public safety, according to Politico.
Newsom, who is term-limited and will leave office in January 2027, has signaled more policy announcements ahead. His proposal represents a stark shift from his general resistance to raising state taxes during his two terms as governor, according to Politico, and marks his most explicit positioning yet as a national figure ahead of 2028.
Sources
- CNN — Newsom’s national billionaire tax proposal, the “economic reset” framing, minimum tax threshold of $100 million, AI equity fund concept, and intergenerational wealth transfer concerns
- Politico — Details of the proposal including the Buffett rule, inheritance rule changes, offshore loopholes, corporate tax rates, and criticism of the California measure’s revenue allocation
- NBC News — Components of the public equity fund including worker transition benefits, childcare, education, healthcare, and AI strategy
- Washington Post — The national public equity fund and AI wealth-sharing concept
