Why Won’t Newsom Tax Billionaires?

Not only are Californians struggling to make ends meet, they also have to contend with a governor who cares more about billionaires and his own presidential aspirations.

Newsom at a press conference in May, 2025 -- Office of the Governor of California, Public domain, via Wikimedia Commons

By Sonali Kolhatkar

California Governor Gavin Newsom has spent 2025 setting himself up as Donald Trump’s leading opponent and the Democratic Party’s 2028 presidential nominee. While the Trump-Newsom rivalry has captivated some voters to pick sides, it should be noted that one of these two political figures is a billionaire-loving, transphobic narcissist. The other is the president of the United States.

Newsom’s performative approach to leadership—one that seems to strategically lack substance—is an aggressive bid to unseat rising authoritarianism via clever rhetoric, macho posturing, and a flirtation with fascist white supremacists. It’s a combination of Hillary Clinton, Joe Biden, and Kamala Harris’s presidential campaigns amped up on toxic masculinity. Newsom is carving a path a few shades to the left of Trump, and far to the right of his liberal and progressive voter base, while shouting from the rooftops that he is the antithesis of Trump.

On the most basic test of economic populism, Newsom is already failing by coming out swinging in defense of billionaires. In explaining his opposition to a union-backed ballot measure to impose a 5 percent tax on the assets of 200 of the wealthiest Californians, Newsom said in January 2026, “I’ll do what I have to do to protect the state.” By this he meant protecting billionaires, not the rest of us.

The measure in question was crafted by health care workers in response to the 2025 federal cuts to Medicaid and health insurance subsidies. Service Employees International Union–United Healthcare Workers West (SEIU-UHW) is sounding the alarm about a $100 billion shortfall over the next five years in California’s health care infrastructure. The proposed measure would impose a one-time tax of only 5 percent on the fortunes of ultrarich individuals living in the state—people who are collectively worth an unimaginable $2 trillion. People like Mark Zuckerberg, the founder of Meta, and Sergey Brin and Larry Page, the co-founders of Google and its parent company Alphabet, among others.

The funds collected would largely pay for health care needs in the states. About 10 percent of it would support public education and food assistance programs. Such a tax would still leave the 200 billionaires outrageously wealthy. But Newsom worries it will push them to leave the state.

There are more billionaires in California than in any other state in the nation. This is unsurprising. Boasting hundreds of miles of stunning coastline, temperate weather, and a rich cultural tapestry, California is a desirable place to live, especially for wealthy people.

“California is awesome,” said Liz Perlman, executive director of AFSCME 3299. “There’s beaches, there’s mountains… the only people who have to leave are the people who can’t afford it because the cost of living is 40 percent higher than any other state.”

Indeed, record numbers of Californians are leaving the state because it’s too expensive to live here. According to the Public Policy Institute of California, far too many lower-income people are relocating compared to higher-income ones. And yet, Newsom is worried about driving billionaires away.

Oddly, some billionaires disagree with Newsom. Nvidia CEO Jensen Huang, who lives in California and would have to shell out nearly $8 billion under the proposed tax measure, said he is perfectly happy to pay up. “We chose to live in Silicon Valley, and whatever taxes they would like to apply, so be it. I’m perfectly fine with it,” said Jensen to Bloomberg Television.

California-based billionaire investor Tom Steyer is also supportive of the tax proposal, saying, “Billionaires should be paying more taxes.”

But Peter Thiel, co-founder of the reviled AI-data corporation Palantir—a company whose CEO admitted it is in the business of helping to kill people—threatened to leave the state over the one-time tax. Thiel has boasted about bankrolling Donald Trump’s party in order to help it retain control of Congress. Why does California’s Democratic governor care about pleasing such a man?

Time and again, anti-tax activists have claimed that wealthy people will leave if they are taxed more, as if such people are bargain hunters who flee when prices rise. It’s as ludicrous as claiming that if Disneyland raised its ticket prices too high, it would become less accessible to its wealthiest patrons, rather than its poorest ones.

The state of Massachusetts in 2022 imposed a 4 percent annual tax on a far larger swath of wealthy residents than California is proposing. That tax, also ushered in by unions, impacts millionaires rather than billionaires, and has raised billions of dollars for education, transit, and other programs benefitting the public. In contrast to California’s proposed tax, Massachusetts’ tax is annual rather than one-time and affects about 20,000 people rather than 200.

After three years of enactment, there has been no significant exodus of wealthy people from the state. And the number of “non-rich, young” people relocating to more affordable states has dropped.

Moreover, an April 2025 study of states such as Massachusetts, which raised taxes on wealthy residents, found that it actually benefitted the rich as well. The Institute of Policy Studies research concluded that “The number of wealthy individuals and their cumulative wealth grew after the enactment of higher taxes on high earners in Massachusetts and a progressive capital gains tax on high-wealth Washingtonians.”

If anything, California needs to adopt an annual tax rather than a one-time tax, on a wider swath of people, not just billionaires. The Trump administration continues to cut social programs such as food stamps, health care subsidies, affordable housing, and environmental plans. Moreover, it targets Democratically-run states with funding freezes. It is incumbent on these states to make up the short fall and ensure the most vulnerable people don’t fall through the cracks.

Americans are hungry for political candidates willing to adopt the simple and elegant math of taxing the wealthy in order to redistribute wealth more fairly. A majority supports higher taxes on the rich, including large majorities of Democratic voters, according to a 2025 analysis by the Pew Research Center. Then why does someone like Newsom insist on bowing down at the altar of billionaire well-being over the public good?

The worst part of the liberal governor’s position is that he is offering no alternative solution to the imminent loss of health care subsidies. “All we’re hearing is the rhetoric and the talking points,” said Perlman. “And we can’t feed our kids on talking points. We can’t take them to the doctor on rhetoric. We need real solutions, and so working people right now are taking matters into their own hands [with the proposed tax].”

SEIU-UHW and other supporters of the 2026 Billionaire Tax Act need to gather nearly 900,000 signatures in order to place the initiative on the November 2026 ballot. And then, they need to convince a majority of voters to back it. Given the public thirst for economic justice, they stand a decent shot—even in the face of a deep-pocketed onslaught of disinformation funded by billionaires like Thiel, and the opposition of a governor dead set on catapulting himself into the White House in 2028.

Sonali Kolhatkar is an award-winning multimedia journalist. She is the founder, host, and executive producer of “Rising Up With Sonali,” a weekly subscriber-funded television and radio show that airs on Free Speech TV and Pacifica stations. Her books include Talking About Abolition: A Police-Free World Is Possible (Seven Stories Press, 2025) and Rising Up: The Power of Narrative in Pursuing Racial Justice (City Lights Books, 2023). She is a writing fellow for the Economy for All project at the Independent Media Institute and was a senior editor at Yes! Magazine covering race and economy. She serves as the co-director of the nonprofit solidarity organization the Afghan Women’s Mission and is a co-author of Bleeding Afghanistan. She also sits on the board of directors of Justice Action Center, an immigrant rights organization.

This article was produced by Economy for All, a project of the Independent Media Institute.