Politics
Newsom Calls Billionaire Wealth Tax ‘Really Damaging’
By Jake Beardslee · January 14, 2026
California Governor Gavin Newsom said a proposed wealth tax targeting the state’s richest residents is already producing negative economic consequences, arguing the policy risks driving investment and high-net-worth individuals out of California.
In a recent interview with POLITICO, Newsom said reports of billionaires moving money and businesses out of the state validated his longstanding opposition to the measure. The governor acknowledged the proposal’s economic risks, warning that uncertainty around the tax is affecting long-term business commitments and entrepreneurial activity.
“This is my fear,” Newsom said in a POLITICO interview on Monday. “It’s just what I warned against. It’s happening.”
He added that economic disruptions are already visible. “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,” he continued. “That’s not what we need right now, at a time of so much uncertainty. Quite the contrary.”
The proposed initiative, backed by the Service Employees International Union–United Healthcare Workers West, has not yet qualified for the November 2026 ballot. If approved, it would impose a one-time 5% tax on the net worth of California residents with assets exceeding $1 billion. Payments would be due in 2027 and could be spread over five years with interest, according to the Legislative Analyst’s Office.
Because eligibility would be determined based on residency as of Jan. 1, 2026, several prominent business leaders have reportedly begun relocating or restructuring holdings outside California.
Public filings reviewed by Fox News Digital show business entities connected to Google co-founder Larry Page were moved out of the state in December. Page has also reportedly purchased two Miami properties valued at approximately $73.4 million. Oracle chairman Larry Ellison sold his San Francisco mansion for roughly $45 million. The New York Times has reported that Google co-founder Sergey Brin and venture capitalist Peter Thiel have shifted portions of their business operations outside California as well.
While Newsom has generally supported progressive tax structures, he argued the billionaire wealth tax would be counterproductive.
Though Newsom has publicly supported a progressive tax structure, he said the billionaire tax “makes no sense,” adding that, “It’s really damaging to the state.”
Reflecting on the policy fight, Newsom told POLITICO, “I have a very specific agenda that I’m trying to follow, and then also [be] very pragmatic about what I don’t know — that is, all the things that come your way that are not on the agenda.” He added, “This is not how I wanted to spend my last year.”
The governor expressed confidence the proposal will ultimately fail at the ballot box. “The good news is the overwhelming opposition to this by others,” Newsom said. “I think it will be defeated, because I think people understand what it does versus what it promotes to do.”
Previously, a spokesperson for the governor told The Wall Street Journal that Newsom opposes “state-level wealth taxes” because they encourage wealthy residents to leave.