California Gavin Newsom is aggressively campaigning against Proposition 40, a November ballot measure that would impose a one-time 5% wealth tax on the state’s approximately 200 billionaires to backfill federal Medicaid cuts, KQED reported.
To hear Newsom talk about economic inequality, his opposition sounds paradoxical. In a June video posted to his Substack and YouTube channels, he called the nation’s tax system a “five-alarm fire” and argued for a true minimum tax on billionaires to ensure top earners match the rates of ordinary workers.
Newsom Opposes Tax to Protect 2028 Presidential Run
Yet Newsom has aligned with high-profile Democrats in opposing the healthcare-union-backed initiative. He argues that such a tax belongs at the national level to prevent wealthy entrepreneurs from fleeing the state, insisting the local levy would ultimately harm California’s budget.
Saikat Chakrabarti, a congressional candidate, told KQED that Newsom’s stance is explicitly tied to his anticipated 2028 presidential run. “He’s made no secret of it — he’s going to run for president,” Chakrabarti said. “And that’s why he’s not just opposed to Prop. 40. He’s vehemently campaigning against it because he needs those billionaires on his side.”
Loyola Marymount University political science professor Fernando Guerra noted that opposing the billionaire tax helps position Newsom favorably with centrist Democrats required for a primary victory. Guerra added that the measure’s broad coalition of opponents, including the California Teachers Association, gives the governor a credibility argument among voters if the measure fails.
Tech Leaders Invest Millions to Defeat Proposition 40
Tech leaders are heavily invested in the outcome. Chris Larsen, who has donated more than $12 million to defeat Proposition 40, told KQED’s Political Breakdown podcast that California’s booming artificial intelligence sector remains one of Newsom’s greatest assets for a national campaign.
“You mean that he comes from the fourth largest economy in the world that’s had the highest number of job growth?” Larsen said, defending the state’s economic climate.
Meanwhile, some billionaires are preparing for the tax’s potential passage. Meta recently struck a deal with CEO Mark Zuckerberg—who had warned he might leave California if the proposition passes—offering him a new non-voting class of shares to help cover a multibillion-dollar tax liability.
Backers of Proposition 40 are escalating their response. The Yes on Prop. 40 campaign launched TV and digital ads criticizing Newsom not in California, but in key early presidential primary states including South Carolina, Nevada, New Mexico, Virginia, and New Hampshire.
Dave Regan, president of SEIU-UHW West and the architect of the billionaire tax, criticized the governor’s alignment with wealthy elites during a July interview on KQED’s Political Breakdown. Regan recounted reports that Google co-founder Sergey Brin confronted Newsom about the wealth tax at a holiday party last winter, remarking that the governor “is acting like a politician with a campaign problem and not a governor with a healthcare problem.”
