--- title: "Newsom fights a state wealth tax while backing a federal one" description: "The governor leaned on the union behind a November ballot measure to tax California billionaires, arguing the wealthy would simply move their assets out of state. At the same time he is calling for a national wealth tax on people worth more than $100 million. Supporters call it consistent; critics call it convenient." category: "California" category_url: https://herald.la/category/california author: "Mei-Lin Tang" published: 2026-07-22T16:48:00.000Z updated: 2026-07-22T16:48:00.000Z canonical: https://herald.la/article/newsom-fights-a-state-wealth-tax-while-backing-a-federal-one tags: ["gavin-newsom", "taxes", "wealth-tax", "california", "2026-election"] --- # Newsom fights a state wealth tax while backing a federal one The governor leaned on the union behind a November ballot measure to tax California billionaires, arguing the wealthy would simply move their assets out of state. At the same time he is calling for a national wealth tax on people worth more than $100 million. Supporters call it consistent; critics call it convenient. Gavin Newsom is trying to hold two positions on taxing the very rich at once, and the tension between them is the story. As [CalMatters reports](https://calmatters.org/newsletter/gavin-newsom-wealth-tax-proposals/), the governor has worked to kill a proposed California wealth tax while simultaneously calling for one at the federal level. ## The state measure he opposed The proposal in question was headed for the November ballot: a state tax on California's billionaires, pushed by a healthcare workers' union. Newsom pressured the union to drop it, and, per the reporting, offered concessions in exchange for pulling the measure. His stated reason is the one opponents of state-level wealth taxes almost always give: that the wealthiest residents are the most mobile, and that California taxing their fortunes on its own would prompt them to move those assets, and potentially themselves, to states that do not. Allied Democrats made the same argument. It is a real economic concern and also, conveniently, an argument that protects a class of donors. ## The federal tax he favors At the same time, Newsom has publicly backed a national wealth tax aimed at anyone worth more than $100 million. The logic is the mirror image of his state position: a federal tax leaves nowhere within the country to flee to, which neutralizes the mobility problem he cites against a California-only version. "The system the American founders built was designed to prevent the concentration of power in a few hands," Newsom said, casting the federal push in the language of democratic principle rather than revenue. ## Consistent, or convenient? Whether these two stances are principled or political depends on how much weight you give the mobility argument, and there is a genuine case on each side. Taken at face value, the positions are economically coherent. A tax that can be escaped by crossing a state line is easier to avoid than one that applies nationwide, and a governor can rationally support the second while opposing the first. That is the charitable reading, and it is not a foolish one. The less charitable reading is about who benefits. Kevin Liao, a Democratic strategist quoted by CalMatters, framed Newsom's maneuver as "balancing two pressures": the demand from many voters to make billionaires pay more, and the governor's long reliance on wealthy Silicon Valley donors. Opposing a tax that would hit those donors directly, while endorsing a federal version that is far from becoming law, lets him answer the first pressure rhetorically without acting on it where he actually has power. ## Why it matters here This is not an abstract debate for California. The state's budget leans heavily on its highest earners, whose capital-gains income swings revenue up in good years and down in bad ones, and the question of how much more the very wealthy can or should be taxed sits underneath nearly every fight over schools, healthcare and homelessness spending. Newsom, widely assumed to be weighing a national run, is also road-testing a message: populist enough to name the problem of concentrated wealth, cautious enough not to enact the state remedy that would test it. The Herald covered the November billionaire-tax measure when it qualified; the governor's move to steer it off the ballot is now part of that same story, and voters will get to weigh both the policy and the politics. ## Sources - [Gavin Newsom's balancing act on taxing the rich](https://calmatters.org/newsletter/gavin-newsom-wealth-tax-proposals/)