Rep. Ro Khanna has sharply criticized California Gov. Gavin Newsom's position on billionaire taxes, labeling it as "hypocrisy" and "propaganda." The disagreement centers on Newsom's recent endorsement of a national billionaire tax proposal while simultaneously opposing a one-time 5% state tax measure that will appear before California voters.
Khanna, speaking to reporters on Friday, argued that Newsom is avoiding a direct confrontation with wealthy donors in his home state. "You can’t hypothetically say I support policies on a national level while ducking the fight in your own state," Khanna stated, suggesting Newsom's national stance is an attempt to "upset the billionaires in my state, so I’m just going to punt this and say, hypothetically, we can solve something at a federal level."
Governor Newsom has voiced opposition to the state tax proposal, citing concerns that it could lead to wealthy individuals leaving California, thereby harming the state's economy in the long run. He has asserted that "the fight to make the wealthiest Americans pay more in taxes is not one we should be fighting state by state."
Newsom's announcement of a national tax idea came after the state's tax measure failed to meet a Thursday deadline to be removed from the ballot. His proposed federal policy aims to "democratize" the economy.
This clash between the two California Democrats is significant, particularly given Newsom's widely anticipated presidential aspirations for 2028 and Khanna's own potential bid for the presidency. Their public disagreement over the tax issue could foreshadow a future Democratic primary contest.
Dave Regan, president of the SEIU-United Healthcare Workers West, a union backing the state proposal, joined Khanna in criticizing Newsom. Regan dismissed fears of "capital flight" from the state tax, stating that Californians are prepared to accept a modest one-time tax from the wealthiest to ensure the stability of the health insurance system for millions.
Khanna further characterized Newsom's national proposal as misleading, arguing that it is not a true wealth tax. "Taxing the loans on assets is something that the tech oligarchs themselves have proposed, because that will raise a fraction of the revenue of an actual wealth tax," Khanna said.
The congressman framed the tax debate as a critical juncture for the Democratic Party, distinguishing between economic populists and those who align with the "donor class." He believes that the outcome of this debate in California will set a precedent for the nation.
Political observers suggest that Newsom's strategy may be an attempt to appeal to progressive voters for a presidential run while maintaining support from wealthy tech donors. According to Dan Schnur, a professor of political communications at USC, Newsom's position, "I am for a billionaire tax — just not this one,' is a politically advantageous message given the state measure's presence on the November ballot.
The state's one-time tax measure is anticipated to trigger a costly election campaign, potentially influencing Newsom's presidential ambitions. Supporters of the tax argue it is necessary to offset federal cuts to healthcare programs. The SEIU-United Healthcare Workers West aims to demonstrate that the wealthiest Californians can contribute a 5% one-time tax to support essential services.