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2h ago

Newsom Escalates Fight Against California’s Proposed Billionaire Wealth Tax

Opposition escalates to a retroactive billionaire levy that still must qualify for the 2026 ballot.

California Gov. Gavin Newsom.
Rep. Sam Liccardo, who represents portions of Silicon Valley, said a proposed billionaire tax would ensure “that California’s largest taxpayers become Texas’ largest taxpayers.”
Saikat Chakrabarti, a candidate for Congress, is one of the few California politicians publicly challenging the assertion that a proposed tax would push billionaires to leave the state.
Gov. Gavin Newsom gives his State of the State address at the State Capitol on Thursday, Jan. 8, 2026, in Sacramento, Calif. (Hector Amezcua/The Sacramento Bee via AP, Pool)

Overview

  • The union-backed measure would impose a one-time 5% tax on net worth above $1 billion, keyed to California residency on Jan. 1, 2026, with proceeds primarily for health care and an option to pay over five years.
  • Gov. Gavin Newsom called the initiative badly drafted and noncompetitive for the state, and his advisors have formed and are fundraising for a committee to defeat it.
  • Backers must collect roughly 875,000 valid signatures by June 24 to place the proposal before voters in November 2026, and are pressing the case as a response to federal health funding cuts.
  • Prominent tech figures have moved assets or operations, including Google co-founders Larry Page and Sergey Brin shifting entities to Nevada, Peter Thiel opening a Miami office, and David Sacks announcing an Austin office.
  • The Legislative Analyst’s Office warned revenue is uncertain and departures could shrink the general fund, while experts such as Penn Wharton’s Kent Smetters say wealth taxes often underperform and are difficult to administer.