California Democratic Gov. Gavin Newsom is facing another blow after a massive wealth tax he warned could cause a wealth and business exodus from the state was officially added to the November ballot.
Despite his opposition, the measure’s sponsor, Billionaire Tax Now, announced Thursday that it was officially being added to the state’s ballot. The measure, called the California Billionaire Tax Act, would impose a one-time, “emergency” 5% tax on Californians with assets exceeding $1 billion. The tax has been endorsed by socialist Sen. Bernie Sanders, I-Vt., who called it “reasonable and necessary” “at a time of unprecedented and growing wealth consolidation and income inequality.”
However, Newsom, a rumored frontrunner for the Democratic Party’s presidential nomination, has come out strongly against the tax, citing fears that billionaires will simply up and leave to states like Texas or Florida.
In a lengthy Substack post on the tax, Newsom wrote, “Last night, it became certain that a wealth tax would be placed on the November ballot in California. I’m voting no.”
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“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, adding, “Wealth is movable, and it shops for the state with the lowest taxes.”
In a state that has already lost prominent business figures such as Elon Musk, Google co-founder Larry Page and Oracle founder Larry Ellison, Newsom is not the only one warning that the billionaire tax could worsen California’s ongoing exodus.
Earlier this year, Silicon Valley tech entrepreneur Allison Huynh predicted in an interview with Fox News Digital that the tax would cause a “mass migration,” starting with “not just the billionaires, but the people who are investing in new ideas, in new infrastructure, whether it’s AI, healthcare, tech, robotics.”
Huynh likened the proposed tax hike to a restaurant about to go out of business.
“Instead of lowering the price, they increase the price,” she said. “And then you go into the restaurant, and it’s like $50 for a bowl of really bad dumplings.”
Fox News Digital reached out to Billionaire Tax Now for comment.
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After news of the measure being added to the ballot broke, Newsom called on the U.S. to institute a national billionaire tax and what he referred to as “a new social contract.”
In an X post, Newsom wrote that “the system is fundamentally broken. The federal tax code, a corporate code, and an inheritance code were written for a different set of Americans. It’s time for an economic reset.”
In his Substack post, he argued “the fight to make the wealthiest Americans pay more in taxes is not one we should be fighting state by state.” Instead, he wrote, “The fight belongs at the federal level, where this broken system was created in the first place.”
In January, Newsom said he felt vindicated in opposing the proposed wealth tax after reports showed some of California’s wealthiest residents moving money and businesses out of the state, warning the measure would damage the economy and drive away investment.
“This is my fear,” Newsom said in a Politico interview on Monday. “It’s just what I warned against. It’s happening.”
“The evidence is in. The impacts are very real — not just substantive economic impacts in terms of the revenue, but start-ups, the indirect impacts of … people questioning long-term commitments, medium-term commitments,” he continued. “That’s not what we need right now, at a time of so much uncertainty. Quite the contrary.”
Despite Newsom’s opposition, the group behind the tax effort — Billionaire Tax Now, sponsored by the Service Employees International Union – United Healthcare Workers West — proceeded to add it to the ballot.
The union posits that the tax will “prevent the collapse of California healthcare and help fund California public K-14 education and state food assistance programs.”
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Billionaire Tax Now is confident the measure will pass, posting on X that “while a few controversial billionaires and their buddies in Sacramento want to see California’s hospitals close and tax breaks for billionaires protected – popular support is on our side.”
Meanwhile, some of Newsom’s detractors claim that his opposition to the measure is driven by a desire to appeal to potential presidential donors.
Billionaire Tax Now reposted an X post by David Sirota, founder of the progressive investigative news outlet The Lever, in which he asserted that “Gavin Newsom is trying to protect 250 prospective 2028 presidential donors, even if that means 3 million of his constituents are medically bankrupted.”
Reached for comment, Newsom’s office directed Fox News Digital to his Substack and video.
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