California Governor Gavin Newsom called for a federal billionaire tax on Friday, proposing a minimum tax on anyone with a net worth above $100 million as part of what he framed as an “economic reset for America.” The announcement came one day after California officials certified a state ballot measure to levy a one-time 5% tax on residents worth more than $1 billion.
Newsom’s counterproposal directly contradicts his vocal opposition to the California Billionaire Tax Act, which received more than 1.6 million signatures—one of the highest signature counts in California history—and will appear on the November ballot. The governor has argued that a state-level wealth tax would hurt California’s economy and that the revenue would not be used to fund key priorities.
In a Substack post and accompanying video released Friday, Newsom framed his federal approach as the only effective solution to wealth concentration. “You may not be able to pick up and move to Texas or Florida to shelter your income from taxation, but I promise you that billionaires can, and do,” he wrote. “Wealth is movable, and it shops for the state with the lowest taxes. The fight belongs at the federal level, where this broken system was created in the first place.”
Newsom’s federal proposal extends beyond a minimum tax rate. He called for making it illegal for the wealthy to borrow against their stock portfolios to fund luxury lifestyles tax-free—a practice sometimes known as “buy, borrow, die” that allows the ultra-wealthy to access capital without triggering income taxes. He also proposed rewriting inheritance tax rules and returning corporate tax rates to their pre-2017 levels, before the major tax cuts enacted during President Donald Trump’s first term.
A third pillar of Newsom’s plan calls for creating a “national public equity fund” to ensure “every American owns a stake in the future being built by AI.” The governor warned that artificial intelligence threatens to displace workers and further concentrate wealth, writing: “We need to ensure every American owns a stake in the future being built by AI through a national public equity fund that takes a major stake in the new economy.”
The revenue from these proposals, Newsom suggested, could fund worker retraining, universal childcare, free college, and increased healthcare funding. His announcement signals a notable shift in the political landscape: Newsom, traditionally a moderate on tax policy despite his liberal reputation, is now embracing wealth-tax rhetoric that struggled to gain traction when Senator Elizabeth Warren centered her 2020 presidential campaign around a 2% wealth tax.
Newsom’s position has drawn sharp criticism from Democratic allies who support the California ballot measure. Congressman Ro Khanna, a California Democrat who has endorsed the state initiative, called Newsom’s federal proposal “toothless” and accused him of catering to the tech industry. “The proposal is exactly what the tech lords have been suggesting,” Khanna said at a Friday press conference. He also challenged Newsom’s claim that billionaires flee high-tax states, citing record venture capital investment in California during the first quarter of 2026.
Newsom, who is widely viewed as a potential 2028 presidential candidate, is laying out his policy framework months before typical presidential campaign season. His early rollout echoes proposals already advanced by other Democrats, including Senator Bernie Sanders, who has called for public ownership stakes in AI companies.
Sources
- The Guardian — Newsom’s federal billionaire tax proposal, minimum tax threshold, opposition to California state measure, arguments about wealth mobility, and AI equity fund plan
- CNBC — Details of Newsom’s federal minimum tax proposal, “tax-free lifestyle loan” loophole closure, corporate tax rate increases, AI public equity fund, and positioning as 2028 presidential candidate
- ABC News — Newsom’s federal minimum tax rate proposal for those with $100 million+ net worth
- CalMatters — California billionaire tax ballot measure qualification with 1.6 million signatures
