Newsom urges a national 'billionaires' tax' while fighting one in California

JONATHAN J. COOPER, Associated Press
Posted

(AP) — California Gov. Gavin Newsom, a Democrat who is considering a run for president as he approaches the end of his term, called for a national “billionaires' tax” on Friday even as he fights another proposal targeting the wealthy in his home state.

Newsom also said the U.S. government should own a stake in artificial intelligence companies. His proposals, outlined in a Substack post, aligns him with the Democratic Party's populist left, and he argued that urgent changes are needed to prevent the elite concentration of wealth and power from undermining democracy.

“It’s time for an economic reset for America,” Newsom wrote.

The governor announced his agenda a day after an influential health care union in California pledged to go forward with a ballot measure that would impose a one-time 5% tax on the assets of billionaires living in the state as of Jan. 1, 2026.

Newsom opposes that measure, as do many of the liberal interest groups that typically favor higher taxes. They fear it would drive billionaires out of California, eroding the state’s tax base over the long term for a one-time influx of cash. A technology mecca, California has more billionaires than any other state — a few hundred, by some estimates.

“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,” Newsom 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.”

A minimum tax on large net worths

Newsom said the solution is a new national tax policy, rather than a state-by-state system. He proposed a minimum tax on anyone with a net worth above $100 million. He also wants to make it illegal for the wealthy to borrow against their stock portfolios to fund their luxury lifestyles tax free.

Newsom said there should be new rules for inheritance taxes, warning that “the transfer of wealth among the ultra-wealthy will lock in a permanent American aristocracy of inherited wealth.” And he wants to raise corporate tax rates to where they were before President Donald Trump’s first-term tax cut.

The need is especially urgent as artificial intelligence threatens to displace workers and further concentrate wealth, he wrote.

“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,” he wrote. "Simply, as artificial intelligence reshapes the country, every American should own a piece of the future it builds."

Revenue generated by his proposals could be used to retrain workers, fund universal child care, make college free and increase funding for health care.

‘Money buys influence’

Newsom, who has drawn attention as one of Trump's most high-profile political antagonists, is getting an early start on laying out a policy framework for his potential White House bid months before the midterm elections, which have typically marked the informal start of overt presidential campaigning.

The embrace of a wealth tax by Newsom, a moderate on tax policy despite his liberal reputation, signals a notable shift in the political landscape since Massachusetts Sen. Elizabeth Warren struggled to get traction in her 2020 campaign, which she largely centered around a 2% levy wealth tax.

Newsom portrayed the nation's tax code as a corrupt system built to help an elite few.

“Money buys influence, and influence rewrites the rules,” he wrote. “Those rewritten rules funnel even more wealth to the few. Under this weight, democracy itself starts to buckle.”