California Governor Gavin Newsom Endorses Plan to Block Billionaire Tax

2026-10-14 politics

Sacramento, Tuesday, 13 October 2026.
California Governor Gavin Newsom endorsed Proposition 42, aligning with a $318 million tech-backed campaign to kill a proposed billionaire wealth tax and permanently ban future personal property taxes.

Governor Newsom Endorses Proposition 42

On Friday, October 9, 2026, California Governor Gavin Newsom officially endorsed Proposition 42, a ballot measure designed to prohibit future state wealth taxes [1][2]. This endorsement serves as a direct counter to Proposition 40, known as the Billionaire Tax Act, which proposes a one-time 5% tax on assets for billionaires residing in California as of January 1, 2026 [2][5]. Governor Newsom’s stance signals a significant executive pushback against progressive tax proposals, aiming to prevent capital flight and preserve the state’s competitiveness for major corporations [1][7]. The Governor stated that Californians deserve to have their retirement and life savings protected from new state taxes [2][7]. This move aligns Newsom with business leaders and high-net-worth individuals who have raised hundreds of millions of dollars to combat wealth tax initiatives [1][3].

Ballot Measure Mechanics and Implications

Proposition 40, if passed, would allocate 90% of its revenue to state healthcare programs for low-income residents and 10% to food and education [1][2]. Conversely, Proposition 42 would constitutionally protect billionaire wealth from new state taxes and potentially nullify Proposition 40 [5][7]. Proposition 42 also bans any new taxes on personal property, including pensions, 401K accounts, financial assets, business holdings, and art collections [2][7]. Critics argue that Proposition 42 is a strategy to defeat taxes on the wealthy rather than provide actual retirement security [5]. The Legislative Analyst’s Office projects that Proposition 40 would raise tens of billions of dollars over several years [5].

Financial Stakes and Donor Influence

Building a Better California, a political influence operation bankrolled by Google co-founder Sergey Brin, has raised about $318 million since it was created earlier in 2026 [3][5]. Recent disclosures showed $21 million in donations, which represents 6.604 of the total funds raised by the group [3][5]. Proposition 42 is funded by Brin and supported by police and fire unions, though Newsom’s stance diverges from the Democratic Party and other labor groups [2][5]. Opponents of the measure, including the Service Employees International Union United Healthcare Workers West, argue that the Governor is prioritizing billionaire wealth over healthcare for millions of children and families [2][7]. U.S. Rep. Ro Khanna campaigned for the billionaire tax and criticized Newsom’s opposition, stating that one cannot be anti-Trump and then do the bidding of Trump donors [2][5].

Economic Context and Election Timeline

Economists Jasper Boll, Emmanuel Saez, and Gabriel Zucman estimate that the combined wealth of California billionaires increased by 144% between 2023 and 2025 [5]. A September 2026 poll by the University of California, Berkeley Citrin Center for Public Opinion Research and Politico indicated 45% voter support for Proposition 40, 43% opposition, and 12% undecided [1][2]. The general election is scheduled for November 2026, where voters will decide on these measures [5][8]. Governor Newsom has consistently opposed state-level asset taxes during his two terms, citing concerns that the wealthy will relocate [2][7]. The outcome of this election will determine the future of wealth taxation in California [4][6].

Sources

Gavin Newsom Wealth tax