Wealth tax would cause California’s rich to flee, Gov Newsom warns
By Biz Carson, Eliyahu Kamisher and Francesca Maglione, Bloomberg
California Governor Gavin Newsom warned that a proposed one-time tax on billionaires will backfire by prompting the ultra-rich to leave the state and expressed disappointment at those who’ve already departed such as Google co-founder Sergey Brin.
“The impact of a one-time tax does not solve an ongoing structural challenge,” Newsom said on Thursday at a Bloomberg News event in San Francisco. “You would have a windfall one time and then over the years you would see a significant reduction in taxes because taxpayers will move.”
RELATED: Billionaire tax proposal roils Bay Area havens, divides politicians
The proposal, backed by SEIU-United Healthcare Workers West, would impose a one-time 5% tax on the total wealth of California billionaires to help offset tens of billions of dollars in projected federal health-care cuts.
Newsom, who can’t veto the measure if it qualifies for the November ballot, said he and his staff have been in direct talks with the union and with wealthy Californians alarmed by the plan, pressing the case for alternative approaches.
“I’m very mindful as a guy who budgets for this state that we rely on a very small number of people that allows us to do historic things,” he said, citing an existing millionaire’s tax that has funded behavioral health programs.
Newsom, who has longstanding relationships with many of the state’s wealthiest residents including Brin, described a range of views among the ultra-rich. He said some have little interest in giving. Others are willing to donate significant sums but want to do so on timelines set by their families or foundations, not through what they see as a forced transfer of wealth. Others have also raised concerns about losing control of their companies.
“I’ve met with all of them,” Newsom said. “Some will never give a penny away. Some I respect. Some I don’t.”
More than half a dozen billionaires have left the state over the potential tax threat with another 15 to 20 families planning to leave if it passes, Bloomberg has reported.
Brin, the world’s third-richest person with a net worth of $268.8 billion, according to the Bloomberg Billionaires Index, has relocated to the Nevada side of Lake Tahoe near Reno where an entity linked to him recently purchased a $42 million mansion. He’s also politically mobilizing other billionaires by seeding a new political group with a $20 million donation, focused on the Golden State.
RELATED: More than half of California’s billionaires call the Bay Area home: Who are they?
Newsom said he was “obviously” disappointed over Brin’s decision to move.
The proposed levy has exposed a broader split within the Democratic Party on how to raise revenue and tackle inequality with California Congressman Ro Khanna endorsing the measure.
Newsom, who’s in his final year of his second term and widely seen as a presidential contender in 2028, described a national wealth tax as “an interesting conversation, but a challenging one too.” Newsom said it would have an impact on the markets and be complicated to assess.
“You’ve got to democratize your economy if you’re going to save democracy, absolutely, but this proposal by one local SEIU, I do not believe is the answer,” he said.
–With assistance from Danielle Moran.
More stories like this are available on bloomberg.com
©2026 Bloomberg L.P.