California Gov. Gavin Newsom is seizing on the Democratic Party’s anti-billionaire movement, despite his opposition to a ballot initiative that would tax his state’s 200 resident billionaires.
Mr. Newsom wants to go even bigger than a statewide tax that would chase out California’s wealthiest residents.
He’s urging a nationwide tax on billionaires in addition to higher estate and corporate taxes.
“It’s time for a national billionaires tax and a new social contract. 10% of Americans own two-thirds of the wealth. Wages have stagnated. The cost of living has skyrocketed,” Mr. Newsom said on social media while announcing his plan.
Mr. Newsom, a Democrat eyeing a 2028 White House run, pitched his tax agenda days after socialist candidates swept key primaries this week and amid a push by the far-left wing of the Democratic Party to tax the rich and redistribute their wealth to pay for housing, childcare, free transportation and other social programs.
Mr. Newsom seized on this growing movement, calling for “an economic reset for America.”
He echoed the discontent of the new socialist movement in a Substack article pitching his tax hike plan.
“There is a working coalition in this country of blue-collar and white-collar, urban and rural, the people who built this country and the people who are trying to find their place in it. They did everything right, and the system still has nothing for them,” Mr. Newsom wrote.
Earlier this month, he declined an offer by union members who collected enough signatures to put a 5% tax on billionaires on the November ballot.
Mr. Newsom said a state tax on billionaires would chase California’s wealthiest residents to Florida, Texas and other low-tax states.
He called for “a true minimum tax” on all of the nation’s billionaires that he said would close loopholes and exemptions that “exist only for the extremely wealthy.”
It would also discourage California’s richest residents, who provide substantial tax revenue, from fleeing.
Mr. Newsom said the nation must “rewrite” inheritance rules to prevent “the largest intergenerational wealth transfer in human history,” which he said, “will lock in a permanent American aristocracy of inherited wealth, with all the political consequences the founders warned us about.”
His tax plan would raise the nation’s 21% corporate tax rate to the graduated, 35% rate that was slashed by President Trump’s 2017 tax cut.
Mr. Newsom’s plan to tax the rich doesn’t impose a specific tax on income. Instead, it would end the “tax-free lifestyle loan,” which he said lets the ultra-rich borrow against stock portfolios without reporting taxable income, letting them pass appreciated assets to their children without taxing capital gains.
He did not detail how he would hike estate taxes.
Mr. Newsom described his plan as “common sense” amid the advance of automation and artificial Intelligence. Every American, he said, should own a stake in AI through a national public equity fund, which he said “could provide a real transition” for laid-off factory workers in Ohio and coders in San Francisco displaced by the new economy.
California’s ballot measure will ask residents whether to impose a one-time, 5% levy on taxpayers and trusts with assets exceeding $1 billion, including business interests, securities, cryptocurrency, vehicles, artwork and intellectual property.
The money would be used mostly to fund the state’s Medicaid program, which proponents say has been hurt by federal cuts under the Trump administration and is poised to lose $19 billion in annual federal funding.
Mr. Newsom’s tax-the-rich plan mirrors the agenda of the Democratic Party’s growing socialist wing, which is calling for raising taxes on the nation’s highest-income earners, for-profit corporations and large inheritances.
In 2028 Democratic presidential primary polls, Mr. Newsom typically places second behind former Vice President Kamala Harris. In 2024, she endorsed President Biden’s plan to impose a 25% tax on unrealized capital gains on individuals whose net worth is greater than $100 million, but she was largely silent on the issue during her presidential campaign.
Democratic Reps. Alexandria Ocasio-Cortez of New York and Ro Khanna of California are among potential 2028 White House candidates who back a tax hike on the ultra-wealthy.
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