Newsom Calls For An End To The Billionaire Tax Proposal: Report

After nearly two weeks of chaotic debate over a proposal to tax California's wealthiest to fund healthcare for the state's most vulnerable, Gov. Gavin Newsom says he is staunchly against the measure.

In an interview with POLITICO this week, Newsom weighed in on the controversial measure as the state's most prominent billionaires say they're preparing to leave the state before the proposal ever goes before voters.

"This is my fear," Newsom told POLITICO. “It’s just what I warned against. It’s happening.”

Proponents say the one-time 5 percent wealth tax could raise $100 billion for healthcare for the state's most vulnerable residents.

Newsom, who is a likely candidate for U.S. president in 2028, said he takes issue specifically with a wealth tax that is exclusive to California. A national conversation, however, could be worth having, he told POLITICO.

“That’s different. That’s very different,” he said. “We live in a competitive reality with 49 other states.”

The measure is being pushed by healthcare union SEIU, which argues that the one-time tax is imperative to account for cuts made by Trump's One Big Beautiful Bill, which could detriment hospitals, eliminate health care jobs and strip healthcare from millions.

The proposal says about 90 percent of the revenue would be directed to health care programs, with the remainder funding food assistance and education initiatives. The tax would apply retroactively to people living or entities operating in California as of Jan. 1, 2026.

While the measure hasn't yet qualified for the November ballot, as it's still in the signature gathering process, it has unleashed chaos among both politicians and the rich.

“It’s a matter of values,” Rep. Ro Khanna wrote on X. “We believe billionaires can pay a modest wealth tax so working-class Californians have the Medicaid.”

Read more from POLITICO: Newsom unloads on California wealth tax proposal: ‘Makes no sense’

The news comes as more companies move operations out of the state in pursuit of lower taxes and less regulation

Jessie Powell, co-founder of the Bay Area-based crypto exchange program Kraken, wrote on X earlier this month that the richest in California would leave if the measure passed in November.

“I promise you this will be the final straw,” Powell wrote. “Billionaires will take with them all of their spending, hobbies, philanthropy and jobs.”

READ MORE: Proposed CA Tax On Billionaires Could Drive Some Out Of State