Gavin Newsom says he's 'burdened by the facts' as he criticizes California billionaire wealth tax proposal
Governor says proposed 5% tax on residents worth over $1B would reduce investments in education, public safety as wealthy flee state
California homelessness crisis worsens as Newsom-backed program burns through millions
‘The Big Money Show’ panel discusses a new report raising questions about California’s massive mental health spending as homelessness worsens and oversight remains limited.
California Gov. Gavin Newsom is forcefully pushing back against a proposed billionaire wealth tax, warning that the plan could cut funding for schools, public safety and other core services rather than fix the state’s budget challenges.
"California has the most progressive tax structure in the United States of America. We do… That said, I fear the way this has been drafted," Newsom said at a Bloomberg News event in San Francisco on Thursday evening.
"I was burdened by the facts. The fact is, it actually will reduce investments in education. It will reduce investment in teachers and librarians, childcare. It will reduce investments in firefighting and police," he continued. "The impact of a one-time tax does not solve an ongoing structural challenge that has been exacerbated by the impacts of H.R. 1."
The governor spoke in depth about the potential consequences of the proposed billionaire tax and answered questions about his conversations with those reportedly leaving California.
FLORIDA WINS AGAIN: QUANTUM COMPUTING COMPANY JOINS EXODUS FROM HIGH-TAX CALIFORNIA
While the initiative has not yet qualified for the November 2026 ballot, the proposal — backed by the Service Employees International Union–United Healthcare Workers West — would impose a one-time 5% tax on the net worth of California residents worth more than $1 billion. The tax would be due in 2027, and taxpayers could spread payments over five years, with additional costs, according to the Legislative Analyst’s Office.
Gavin Newsom, governor of California, during an interview in San Francisco, California on Thursday. (Getty Images)
If voters approve the measure, anyone who was a California resident on Jan. 1, 2026, would owe the tax, according to the proposal.
Doubling down on previous comments opposing the tax, Newsom said new data from the Legislative Analyst’s Office show the proposed wealth tax would bring a "one-time" windfall, then "over the years, you would see a significant reduction in taxes because taxpayers will move. And that is what I fear at a state level."
"There's impact as it relates to the flow of capital, the impacts on the market, which are not inconsequential," the governor added. "You've got to democratize our economy if you're gonna save democracy, absolutely. But this proposal by one local [SEIU–United Healthcare Workers West], I do not believe is the answer."
"California’s billionaires pay much lower tax rates than what working families pay out of every paycheck. And soon, massive federal health care funding cuts in 2026 will collapse key parts of the California healthcare system," Trevor Foreman, an SEIU member and hospital security officer in Sacramento, told Fox News Digital on Wednesday.
Luxury real estate agent unveils 'tipping point' for CA billionaires who are moving to Miami
The Corcoran Group agent Julian Johnston exclusively speaks to Fox News Digital about the new wave of California billionaires migrating to South Florida due to a proposed wealth tax.
"Local hospitals and emergency rooms will shut their doors forever because billionaires insist on paying less than the rest of us. In addition, more than 4 million businesses will face steep increases in health insurance premiums, leading to widespread layoffs across multiple industries as employers absorb the higher costs of coverage," Foreman continued.
Newsom said he doesn’t doubt the union has the willpower and resources to get its measure on the November ballot.
"They have the money… we’ll see," he said. "There’s a lot of leverage in this… By the way, someone said to me, ‘You need to veto this.’ I said, well, I can't, because it's not legislative. And by the way, the legislature's not promoting this."
"It's just become a story, even though, for me, it was an issue we've been tackling for five or six months," Newsom expanded. "I've engaged with the proponent of it directly, indirectly, my staff consistently is working with the person that's championing this. I've met with people that feel they're being attacked because of it, people that have no problem paying more income tax. People that literally are giving away all of their money but want to do it on the timeline that their family has approved… People that are concerned about losing control of their company because of the unique characteristics of their cash situation. Yes, I've met with all of them, and they're all in different stages of their lives, careers and their abundance. And some will never give a penny away, some I respect, some I don't."
Gavin Newsom is a ‘beautiful shapeshifter’ in politics: Caroline Downey
'The Bottom Line' panelists Caroline Downey and Brianna Lyman criticize California Gov. Gavin Newsom’s trip to Davos and sound the alarm on a Democratic governor’s ‘bait and switch’ on ‘The Bottom Line.’
GET FOX BUSINESS ON THE GO BY CLICKING HERE
When asked about how he approaches this conversation with California’s 200 billionaires, Newsom said that "there's some extraordinarily enlightened people in that category, and there's some that they put a mask on."
"I think they're disappointed in some respect as well. I mean, it's just a lot of anxiety out there," Newsom noted. "That's why we're doing more in health care, the largest health care expansion in the country that is also putting pressure on our Medicaid budget – there's no question about that – to absorb and offset that anxiety and stress. But I do think this is unfortunate, and we'll continue to make a case for alternative[s]."