California Gov. Gavin Newsom has called for a national "billionaires' tax" and proposed that the U.S. government should take an ownership stake in artificial intelligence companies. These proposals, outlined in a Substack post, align Newsom with the populist left wing of the Democratic Party and aim to address concerns about the concentration of wealth and power.
Newsom stated, "It's time for an economic reset for America." His agenda was announced a day after a California health care union committed to advancing a ballot measure that would levy a one-time 5% tax on the assets of billionaires residing in the state as of January 1, 2026.
Despite his call for a federal wealth tax, Newsom opposes the proposed state-level measure. He, along with many liberal interest groups, fears that such a tax could prompt billionaires to leave California, thereby diminishing the state's long-term tax base for a temporary revenue gain. California, a hub for technology, is home to hundreds of billionaires, according to some estimates.
"Wealth is movable, and it shops for the state with the lowest taxes," Newsom wrote. "The fight belongs at the federal level, where this broken system was created in the first place."
Newsom's proposed federal policy includes a minimum tax for individuals with a net worth exceeding $100 million. He also advocates for prohibiting the wealthy from borrowing against their stock portfolios, a practice that allows them to finance lavish lifestyles tax-free. Additionally, he called for stricter rules on inheritance taxes to prevent the "permanent American aristocracy of inherited wealth." Newsom also suggested raising corporate tax rates to pre-Trump administration levels.
He emphasized the urgency of these changes, particularly in light of artificial intelligence's potential to displace workers and further concentrate wealth. "We need to ensure every American owns a stake in the future being built by AI through a national public equity fund that takes a major stake in the new economy," he wrote. "Simply, as artificial intelligence reshapes the country, every American should own a piece of the future it builds."
Newsom suggested that revenue from these policies could fund worker retraining programs, universal childcare, free college tuition, and increased healthcare funding.
His public stance on wealth taxation marks a significant development, as he is considered a prominent political antagonist to former President Donald Trump. This positioning comes months before the midterm elections, which typically signal the unofficial start of presidential campaign activities. Newsom's embrace of a wealth tax, coming from a governor often seen as moderate on tax policy, contrasts with the struggles of Sen. Elizabeth Warren's 2020 presidential campaign, which heavily featured a proposed 2% wealth tax.
Newsom characterized the current U.S. tax code as a system that benefits a select few. "Money buys influence, and influence rewrites the rules," he wrote. "Those rewritten rules funnel even more wealth to the few. Under this weight, democracy itself starts to buckle."