Newsom Endorses Ballot Measure That Would Cancel Out Billionaire Tax—and Ban Future Wealth Taxes
"He’d rather millions of children and families lose their healthcare than ask a couple hundred billionaires to finally pay their fair share."
California Gov. Gavin Newsom ramped up his opposition to a proposed tax on the state's billionaire residents on Friday by endorsing a competing ballot measure that would both cancel out the billionaire wealth tax initiative and prohibit any new taxes on the ownership of financial assets or other personal property.
"He’s showing California his true colors," Debru Carthan, vice president of Service Employees International Union-United Healthcare Workers West (SEIU-UHW)—which is leading the campaign for the California billionaire tax—said in response to Newsom's endorsement of Proposition 42. "He’d rather millions of children and families lose their healthcare than ask a couple hundred billionaires to finally pay their fair share."
The push for Proposition 42 is funded by Building a Better California, a group bankrolled by Google co-founder Sergey Brin and other billionaires.
If passed, Prop 42 would ban "any new state tax... imposed on the ownership of personal property (all things people own other than real estate)." It would also prohibit any tax that "applies retroactively based on taxpayer’s past activities." (The proposed 5% billionaire tax, which will appear on California's November ballot as Proposition 40, would apply retroactively to billionaires living in California on or after January 1, 2026.)
In a statement, Newsom framed his support for Prop 42 as an effort to protect Californians' retirement savings.
"We all agree that Californians deserve to have their retirement and life savings protected from new state taxes so those savings are there when they need them," the governor said.
But critics have described Prop 42 as a "poison-pill measure" whose supporters are fearmongering about a nonexistent threat to retirement savings in an effort to defeat the proposed billionaire tax, revenue from which would be used to fund healthcare, food aid, and education in the state.
"Its true target is Prop 40," the editorial board of the San Francisco Chronicle wrote of the Newsom-backed measure. "Prop 42 papers over its real purpose by cynically appealing to middle-class worries about retirement security. Reject this appalling tactic and disincentivize its further use by voting no."
Newsom has opposed the idea of a wealth tax on California's billionaires from the proposal's inception, pitting him against major unions, the California Democratic Party, and prominent national progressives such as Sen. Bernie Sanders (I-Vt.) and Rep. Ro Khanna (D-Calif.).
"Some of the SEIU-UHW members I’ve talked to are tired of Democratic politicians like Gavin Newsom taking their marching orders from the donors who would fund a future presidential campaign," Khanna, who is considering a presidential run, said during a rally in support of Prop 40 last weekend. "We are tired of a governor defying grassroots delegates in the California Democratic Party, defying California labor... all because he’s on the side of Trump allies like Peter Thiel and Sergey Brin."
"You can’t pretend to be anti-Trump if you’re doing the bidding of Trump donors," Khanna added.
