They called the measure an “emergency billionaire tax” aimed at recouping tens of billions of dollars that will be stripped from California’s 15 million Medicaid recipients over the next five years, after Republicans passed historic cuts to the program in July with President Donald Trump’s “Big Beautiful Bill,” which dramatically cut taxes on the wealthiest Americans.
Among those beneficiaries were nearly 200 billionaires living in California, whose average annual income rose by 7.5% annually, compared to about 1.5% for middle-income residents.
Under the proposal, they would pay a one-time 5% tax on their total net worth, which is expected to raise $100 billion. The vast majority of the money, about 90%, will be used to restore Medicaid funding, while the rest will go toward funding K-12 education, which the GOP also cut.
The proposal in California is strong supports From unions and health care groups. But Newsom did Named It is “bad policy” and “another attempt to grab money for private purposes.”
Meanwhile, several of his longtime advisers, including Dan Neumann and Brian Brokaw, launched a campaign alongside “business and technology leaders” to stop the measure, which they called “Stop the Lobby.” They have issued familiar warnings that squeezing the wealthy too hard will force them to leave the state, along with the important tax base they provide.
On Wednesday New York Times At the DealBook Summit, Andrew Ross Sorkin asked Newsom about his opposition to the idea of a wealth tax, comparing it to a proposal by New York City Mayor-elect Zahran Mamdani, who pledge To increase income taxes on New Yorkers earning more than $1 million annually by 2% to fund his citywide free busing, universal child care, and city-owned grocery store programs.
Mamdani’s proposal was met with a series of similar warnings from Big Apple bigwigs who have threatened to flee the city and others across the country who say they would never move there.
But like Robin Kaiser Schatzlin He explained In October l American Prospect: “The evidence for this is weak: mostly memes shared by those working in technology and finance… Research shows that the truth of the matter is closer to the opposite. Wealthy individuals and their income move at lower rates than other income groups, even in response to personal income tax increases.” Many of those who frowned at Mamdani’s victory have noticeably begun Modify With the next mayor
Moreover, the comparison between Mamdani’s plan and the plan proposed in California is wrong to begin with. As Harold Merson He explainedalso for probability: “It is a one-time tax, levied exclusively on billionaires’ current (i.e. 2025) net worth. Even if they moved to Tasmania, they would still be liable for 5% of this year’s net worth.”
He added: “Most importantly, the tax will not affect the fortunes of any billionaire who moves to the state next year or in any subsequent year, because it only applies to billionaires who live in the state this year.” “So… the specter of a terrifying billionaire escape cannot be imposed on California’s proposal.”
However, Sorkin portrayed Newsom as being in an existential battle of ideas with Mamdani, asking how the two can represent the Democratic Party when they are “diametrically opposed.”
“Well, I want to have a big tent party,” Newsom replied. “It’s about addition, not subtraction.”
Asked whether there should be a “unified theory of the issue,” Newsom responded, “We all want to be protected, we all want to be respected, we all want to be connected to something bigger than ourselves. We have core values that I think define our party, around social justice and economic justice.”
He continued: “We have pre-distribution Democrats, and we have redistribution Democrats.” “Here lies the controversy, here lies the controversy.”
Polls are still scarce so far on the likelihood of such a measure passing in California. But nationally, polls indicate that the vast majority of Democrats fall on the “redistribution” side of Newsom’s “dialectic.” In fact, the majority everyone Americans do this, regardless of party affiliation.
last year, Inequality.org Checked it 55 national and state surveys on a number of different tax policies and found:
The billionaire income tax received the most support across party lines. On average, two in three (67%) Americans supported the tax, including 84% of Democrats, 64% of independents, and 51% of Republicans.
In national opinion polls, a wealth tax has enjoyed similarly high levels of support. More than three in five Americans supported the tax, including 78% of Democrats, 62% of independents, and 51% of Republicans.
This feeling appears to have increased since the return of President Donald Trump. that Economist/The YouGov poll was released in early November Found 72% of Americans said taxes on billionaires should be increased, including 95% of Democrats, 75% of independents, and 48% of Republicans. Across the board, only 15% said these issues should not be raised.
Support remains high when the proposal is more specific as well. On the eve of Mamdani’s election, and despite months of fear-mongering, 64% of New Yorkers He said They supported his proposal, including a few self-identified conservatives, according to a Siena College poll.
Many observers were puzzled by how Newsom proposed to maintain the “big tent” while opposing policies that most people within it support.
“A wealth tax is big tent politics unless the only people you care about are billionaires,” wrote Jonathan Cohen, political director of Progressive Mass, a grassroots organization in Massachusetts. Social media.
“Gavin Newsom –Estimated net worth Between $20 and $30 million – He says he opposes imposing a tax on the wealth of billionaires. “I’m shocked” books Columbia University lecturer Anthony Zenkos. “Democrats viewing him as a potential savior for 2028 is a clear example of not reading the room.”
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