Billionaire Tax Brawl Splits California Left

A man in business attire with a serious expression, captured in a medium shot

California Gov. Gavin Newsom is now pushing a national billionaire tax while battling a California wealth tax that even many Democrats fear could chase capital out of the state.

Quick Take

Newsom called for a national “billionaires’ tax” and a minimum tax on people with more than $100 million.^[1]
He opposes the California measure because supporters worry it could drive billionaires out and shrink the tax base.^[2]^[4]
State analysts say the plan could bring in a large one-time windfall but also cut income tax revenue for years.^[3]^[5]
The fight has split liberal Democrats, unions, and other allies who usually back higher taxes.^[3]^[8]

Newsom Tries to Shift the Fight Nationally

Newsom said the better answer is a national tax policy, not a state-by-state fight. He proposed a minimum tax on anyone with a net worth above $100 million, and he described it as a modern Buffett rule. He also said the wealthy should not be able to borrow against stock portfolios and still live tax free.^[1]^[2]

That message matters because it shows Newsom trying to split the difference between two audiences. He can sound populist for his national profile while still arguing that California should not risk losing wealthy residents who pay a lot of taxes. The move also fits his broader effort to frame himself as tough on wealth, but careful about the damage a state-level tax could do.^[1]^[4]^[6]

California Critics Warn of Long-Term Damage

The California proposal would levy a one-time 5 percent tax on billionaires, with most of the money aimed at health care. The Legislative Analyst’s Office said the measure could produce tens of billions in short-term revenue, but it also warned of an ongoing drop in income tax receipts if wealthy residents leave. That warning is the core of Newsom’s case against the state measure.^[5]^[6]

Newsom has said the initiative would pull revenue into one spending lane while ignoring other needs. He pointed to schools, safety net programs, reproductive health care, housing, and other state demands. Supporters say the tax would help cover major health care cuts, but opponents say the design is too narrow and too easy to evade.^[1]^[5]^[6]

Democrats Split Over the Measure

The fight has exposed a sharp divide inside California’s left. Reports show Planned Parenthood Affiliates of California, the California Teachers Association, hospital groups, and other Democratic-aligned players have raised concerns about the tax. Some backers want the money for health care, while critics fear the state will lose investment, jobs, and future tax revenue.^[3]^[8]

Gavin Newsom:
Tax the billionaires

Also Gavin Newsom:
($30 million net worth)
Don't tax the millionaires

— The_Veterans_Den (@BaneDaRaider) June 26, 2026

Public polling also appears to give Newsom political room to resist. One report said support was below 50 percent and undecided voters leaned against it after hearing the summary. That makes the governor’s stance less risky than it would be if the measure were already a clear favorite. It also explains why he can oppose the state plan while calling for a national version that sounds more controlled.^[2]^[4]