California Gov. Gavin Newsom is drawing a sharp distinction between state and federal approaches to taxing the ultra-wealthy — backing a national billionaire tax while urging voters to reject a similar proposal on California’s November ballot.
In a Substack post published Friday, June 26, the Democrat called for a sweeping “economic reset” that includes a federal minimum tax on billionaires, arguing the current system allows the wealthiest Americans to avoid paying their fair share.
The proposal comes just a day after a California initiative imposing a one-time 5% tax on billionaires officially qualified for the ballot, despite Newsom’s opposition.
“Just 10% of people in this country own two-thirds of the wealth,” Newsom wrote, warning that the nation risks “a permanent American aristocracy of inherited wealth” without major policy changes
Why Newsom opposes California’s billionaire tax
Newsom has been a consistent critic of the California Billionaire Tax Act, which would levy a one-time 5% tax on residents with net worth exceeding $1 billion and could raise roughly $100 billion.
His objections center on both policy design and economic risk:
“Wealth is movable, and it shops for the state with the lowest taxes,” Newsom wrote, arguing the issue “belongs at the federal level.”
The governor has said he understands the frustration driving the measure but considers it an incomplete solution to a broader, national problem.
What Newsom is proposing instead of the Billionaire Tax
Newsom’s federal plan centers on creating a minimum tax on billionaires, modeled on a “modern Buffett Rule,” to ensure the wealthiest Americans pay at least the same effective rate as their workers.
The original Buffett Rule, proposed during the Obama administration, aimed to set a minimum 30% tax rate on millionaires but failed in the Senate in 2012.
Beyond a minimum tax, Newsom outlined a broader agenda:
Newsom framed the plan as necessary to address stagnating wages, rising costs, and the economic disruptions expected from AI.
Newsom’s political calculation behind the wealth tax pivot
Newsom’s move is widely viewed as both a policy argument and a political repositioning as he approaches the end of his governorship and weighs a possible 2028 presidential run.
The timing is notable: his national proposal landed within hours of the California measure becoming inevitable, signaling an effort to reframe the debate rather than defend opposition to taxing the wealthy.
Key elements of the political strategy include:
In short, the pivot allows Newsom to embrace the politics of taxing the rich while rejecting a specific policy he sees as flawed, a balance that could shape both the coming November ballot fight and his national political ambitions.
This article originally appeared on Palm Springs Desert Sun: Why Newsom wants a federal billionaire tax, not California’s
Reporting by Noe Padilla and James Ward, USA TODAY NETWORK / Palm Springs Desert Sun
USA TODAY Network via Reuters Connect
By Noe Padilla and James Ward, USA TODAY NETWORK | USA TODAY Network
