California Gov. Gavin Newsom has taken a firm stand against a proposed wealth tax, warning that it’s already pushing the state’s richest residents to pack up and leave.
On Monday, Newsom spoke to Politico, expressing his opposition to the measure, which has not yet qualified for the November 2026 ballot.
Backed by the Service Employees International Union–United Healthcare Workers West (SEIU–United Healthcare Workers West), the proposal would impose a one-time 5% tax on the net worth of residents with assets over $1 billion, due in 2027.
Reports show prominent figures like Google co-founders Larry Page and Sergey Brin, Oracle chairman Larry Ellison, and venture capitalist Peter Thiel have moved money or businesses out of state, Fox Business reported.
The issue has sparked intense debate over California’s economic future. Newsom argues the tax would harm revenue, deter start-ups, and weaken long-term investment, while supporters claim it’s a necessary step to address inequality.
Newsom didn’t hold back in his Politico interview, calling the tax a disaster in the making. He pointed to the exodus of wealth as proof, with filings showing Larry Page relocating business entities in December and buying Miami properties worth $73.4 million.
Larry Ellison sold his San Francisco mansion for $45 million, while Sergey Brin and Peter Thiel have shifted operations elsewhere, per The New York Times. If this tax applies to anyone residing in California on Jan. 1, 2026, as planned, more will likely follow.
Newsom told Politico, "This is my fear. It’s just what I warned against. It’s happening." He’s not wrong—when billionaires bolt, they take jobs, innovation, and tax dollars with them.
The governor’s stance isn’t just personal; it reflects a wider sentiment. He noted in the interview that there’s “overwhelming opposition” to the measure, predicting its defeat at the ballot box.
Even the payment structure—allowing taxpayers to spread costs over five years with interest, per the Legislative Analyst’s Office—doesn’t ease the sting. Why would anyone stay to pay a punitive 5% on their net worth when they can move to friendlier states?
Newsom also said to Politico, "The evidence is in. The impacts are very real — not just substantive economic impacts in terms of the revenue, but start-ups, the indirect impacts of … people questioning long-term commitments, medium-term commitments." This isn’t about shielding the rich; it’s about keeping California competitive.
On Tuesday, SEIU–United Healthcare Workers West Chief of Staff Suzanne Jimenez criticized Newsom’s position in a statement to Fox News Digital. She accused him of lacking leadership amid looming healthcare cuts.
Jimenez’s point about protecting vulnerable communities is sincere, but it dodges the reality of capital flight. If the ultra-wealthy leave, who funds those programs?
Newsom’s broader perspective at The New York Times DealBook Summit in December 2025 holds weight here. States can’t operate in a bubble on tax policy, or they risk becoming islands of good intentions with empty treasuries.
This proposed tax isn’t just a policy debate; it’s a test of California’s priorities. Will the state chase quick revenue at the cost of sustained growth?
Newsom’s cautions warrant serious thought, especially as evidence of billionaire relocations piles up. Opposing this measure isn’t abandoning fairness; it’s acknowledging economic reality as a hard rule.
California must tread carefully, or risk losing what made it a powerhouse. The Golden State’s legacy of innovation shouldn’t be gambled on short-sighted plans.
