Failing 'Moral Test,' Newsom Rejects Compromise 2% Wealth Tax on California Billionaires
"I want a Democratic party that will stand for the working class," said Rep. Ro Khanna, a supporter of taxing billionaire wealth. "Whose side are you on?"
California Gov. Gavin Newsom on Thursday refused to budge from his opposition to a proposed wealth tax on the Golden State's billionaires, swiftly dismissing a union-led coalition's effort to compromise by reducing its desired 5% rate by more than half.
In a letter to Newsom on Thursday, the Billionaire Tax Now coalition urged the governor and likely 2028 presidential candidate to support a "2% wealth tax on the state’s richest 200 billionaires." The coalition's demand came hours after organizers announced that they had collected enough signatures to get their proposed one-time, 5% tax on billionaire wealth on California's ballot in November.
Newsom's office made clear that the governor, who has been outspoken in his opposition to the proposed 5% wealth tax, would not support the compromise offer.
"The governor has been clear that he is strongly opposed to a California-only wealth tax," Tara Gallegos, a spokesperson for Newsom, said in a statement. "Changing the tax rate doesn’t change this measure’s fundamental flaws that harm working Californians.”
The Billionaire Tax Now coalition on Thursday offered to withdraw its popular ballot initiative calling for a one-time 5% levy on California billionaires' wealth if Newsom agreed to throw his weight behind legislation enacting a 2% wealth tax instead. Organizers and supporters say a tax on the vast fortunes of the state's wealthiest residents would help avert a looming healthcare disaster spurred by federal Medicaid cuts that President Donald Trump and congressional Republicans passed last summer.
"California is home to more billionaires than any state in the nation," the coalition wrote in its letter to Newsom on Thursday. "Their wealth has grown a staggering 212% in the last six years alone to more than $2.2 trillion dollars. A 2% one-time tax on that accumulated wealth is modest by any objective measure, especially if it means keeping emergency rooms open and saving patient lives. It’s more than appropriate at a moment when every other Californian is being asked by Sacramento to sacrifice."
"We need you to stand up against one of Trump’s worst and deadliest domestic policy blunders yet—the cuts to California healthcare contained in the 'One Big Beautiful Bill,'" the coalition added. "Let’s save patient lives together."
US Rep. Ro Khanna (D-Calif.), a Silicon Valley representative who has supported the proposed wealth tax in the face of angry billionaire backlash, expressed support for the 2% compromise offer in a social media post on Thursday, noting that "250 billionaires own half of California GDP."
"Taxing them at 2% would save healthcare for millions. Healthcare workers have already compromised from 5%," Khanna wrote. "I want a Democratic party that will stand for the working class. This is a moral test for our party. Whose side are you on?"
