California Gov. Gavin Newsom proposed a national tax on ultra-wealthy Americans on Friday while opposing a California ballot measure that would impose a one-time tax on billionaires in the state. The move places Newsom at the center of a growing Democratic fight over wealth, artificial intelligence, and how far states should go in taxing extreme fortunes.
Newsom Calls for Federal Billionaire Tax
Newsom’s plan would create a national minimum tax for people worth more than $100 million. The goal is to prevent ultra-wealthy households from paying lower effective tax rates than many wage earners. His proposal targets legal tax strategies often used by the wealthy, including borrowing against stock holdings rather than selling assets and triggering capital gains taxes. Newsom also wants changes to inheritance rules, arguing that unchecked wealth transfers could deepen political and economic inequality.
The plan calls for a minimum tax on billionaires, restoration of higher corporate tax rates, and limits on loopholes tied to unrealized gains. It does not yet include full legislative text or a detailed revenue estimate.
California Measure Would Tax Billionaires Once
The California proposal would impose a one-time 5% tax on residents with a net worth above $1 billion. Billionaires could pay the tax over several years under the initiative’s structure. The measure, formally known as the 2026 Billionaire Tax Act, would direct most of the money to healthcare programs. Smaller portions would support education and food assistance programs.
The initiative text says revenue supports healthcare programs, public education, and food assistance. Supporters argue the money is needed because healthcare systems and safety-net programs face budget pressure.
Governor Warns Capital Could Leave
Newsom’s opposition rests on the risk that billionaires could leave California before or after the tax is imposed. He has argued that wealthy residents and companies can move quickly when state tax policy changes. California depends heavily on income taxes paid by high earners. That makes the state vulnerable when stock markets fall or wealthy taxpayers relocate.
Ballot Fight Draws Tech Money
The campaign is already becoming one of the most expensive tax fights in California. Wealthy technology figures and business-aligned committees have moved early to defeat or weaken the proposal. The measure would affect roughly 200 California billionaires, based on estimates cited during the ballot campaign. Supporters estimate it could raise about $100 billion.
That projection is likely to face heavy scrutiny before voters decide. Opponents are expected to challenge both the revenue assumptions and the likelihood that billionaires would remain in California long enough to pay.
AI Fund Expands Newsom’s Argument
Newsom’s proposal goes beyond taxing billionaires. He also called for a national public equity fund tied to artificial intelligence, giving Americans a public stake in wealth created by major technology advances. The fund could support worker transition benefits, childcare, free higher education, career training, and healthcare. Newsom argues that AI could produce enormous wealth while also disrupting jobs and wages.
Democratic Split Grows Over Wealth Taxes
The fight exposes a divide among Democrats over how to tax the ultra-rich. Progressive leaders have pushed wealth taxes as a direct response to inequality and public-service strain. Newsom is taking a more cautious route. He supports higher taxes on extreme wealth, but he wants the policy written nationally so wealthy residents cannot avoid it by changing state residency.
Voters Will Decide in November 2026
Newsom’s position leaves voters with two competing Democratic arguments. One says California should tax billionaire wealth now to protect public services. The other says billionaires should pay more, but only under national rules that prevent state-by-state escape.
