Newsom Says He'll Vote No on California's Billionaire Tax Measure

California Governor Gavin Newsom is breaking with progressives in his own party, saying he will personally vote no on the state's billionaire tax measure headed to the November ballot. The pushback lands as he openly weighs a 2028 presidential run.

What the measure actually does

The California proposal would levy a one-time 5% tax on residents with a net worth over $1 billion. It was introduced by healthcare workers union SEIU-UHW in response to steep healthcare funding cuts resulting from President Donald Trump's “Big Beautiful Bill.”

Backers gathered more than 870,000 signatures and include progressives like Vermont Sen. Bernie Sanders and California Rep. Ro Khanna.

Why Newsom is voting no

Newsom and others fear it would drive businesses out of California, and that the revenue collected would not be spread around widely enough. “You may not be able to pick up and move to Texas or Florida to shelter your income from taxation, but I promise you that billionaires can, and do,” Newsom wrote. “Wealth is movable, and it shops for the state with the lowest taxes.”

Newsom also objects to the California billionaire tax because the revenues would mainly be used to fund state spending on Medicaid, and not on other needs.

Billionaires are already spending big to kill it

The nonprofit Building a Better California, which supports committees promoting two competing ballot initiatives that would nullify the billionaire tax initiative if passed, has raised more than $118 million, with $80 million of that coming from Google co-founder Sergey Brin.

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Newsom's counter: a national billionaire tax

Newsom's counter proposal calls for a federal minimum tax rate on Americans worth more than $100 million, rather than a state level one-time 5% wealth tax that the governor argues could be dodged by billionaires who could leave the state for another.

Newsom also suggests ending what he calls the “tax-free lifestyle loan” — the practice adopted by many billionaires of borrowing against stock holdings, reporting no taxable income, then passing the appreciated assets to heirs untaxed. He is also proposing a national public equity fund that would take a major stake in the AI economy, with revenues helping fund transitions for workers displaced by AI.

The 2028 angle

Dan Schnur, a political science professor at UC Berkeley, called Newsom's tax proposal “savvy political positioning” as it helps him enter the 2028 field without being seen as an opponent to taxing the rich. “He's not against taxing billionaires, he just has a different way of doing it,” Schnur said. “He now has an answer for progressive Democrats, whether in California or in early primary states, as to why he didn't support the ballot measure.”

Khanna isn't buying it. “It's the difference between standing up for 3 million Californians who are losing healthcare or standing for the billionaire class,” he said.

Options market and stocks to watch

Watch for ripple effects across California-heavy names if the measure gains traction in polling:

• GOOGL: Sergey Brin is personally funding the opposition campaign. Watch for headline risk tied to Alphabet executives and political spending disclosures.
• META: Mark Zuckerberg is a California-domiciled billionaire and a direct target of the measure. Watch for any sympathy moves on tax-flight chatter.
• TSLA: Elon Musk already relocated Tesla's HQ to Texas. Watch for renewed “California exodus” narrative trades.
• ORCL: Larry Ellison's prior Texas move keeps Oracle in the same conversation around state tax arbitrage.
• NVDA: Jensen Huang is among California's highest-net-worth residents. Watch insider activity and any commentary tied to state policy.

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