Newsom criticizes CA’s billion-dollar wealth tax, warning it will cut vital resources
The ‘Big Money Show’ panel discusses a new report that raises questions about massive mental health spending in California as homelessness worsens and supervision remains limited.
California Gov. Gavin Newsom is pushing back on a proposed billionaire wealth tax, warning that the plan would cut funding for schools, public safety and other critical services rather than solving the state’s budget challenges.
“California has the most progressive tax structure in the United States of America. We do… That said, I’m afraid of the way this is written,” Newsom said at a Bloomberg News event in San Francisco on Thursday evening.
“I was struggling with the facts. The truth is, it will actually reduce investment in education. It will reduce investment in teachers and librarians, child care. It will reduce investment in firefighters and police,” he continued. “The one-time tax impact does not solve the ongoing structural challenge that has been exacerbated by the effects of HR 1.”
The governor spoke in depth about the potential consequences of the proposed multibillion tax and answered questions about his conversations with those who are reportedly leaving California.
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Although the plan is not yet up for a November 2026 ballot, the proposal — backed by the Service Employees International Union-United Healthcare Workers West — would impose a one-time 5% tax on the net worth of California residents over $1 billion. The tax is due in 2027, and taxpayers can spread the payments over five years, with additional costs, according to the Legislative Analyst’s Office.
Gavin Newsom, governor of California, during an interview in San Francisco, California on Thursday. (Getty Images)
If voters approve the measure, anyone who was a California resident on Jan. 1, 2026, will owe taxes, according to the proposal.
Doubling down on previous views against the tax, Newsom said new data from the Legislative Analyst’s Office shows that the proposed wealth tax will bring a “one-time” windfall, then “over the years, you will see a significant decrease in taxes because taxpayers will leave. And that’s what I fear at the federal level.”
“There is an effect related to the flow of money, effects on the market, which is not trivial,” said the governor. “You have to democratize our economy if you’re going to save democracy, absolutely. But this is a local proposal. [SEIU–United Healthcare Workers West]I don’t believe that is the answer.
“California’s billionaires are paying much lower tax rates than working families are paying with every paycheck. And in the near future, major cuts to federal health care funding in 2026 will destroy key parts of California’s health care system,” Trevor Foreman, SEIU member and hospital safety officer in Sacramento, told Fox News Digital on Wednesday.
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“Local hospitals and emergency rooms will close their doors forever because billionaires insist on paying less than the rest of us. In addition, more than 4 million businesses will face significant increases in health insurance premiums, leading to increased layoffs in many industries as employers absorb the higher costs of providing services,” Foreman continued.
Newsom said he has no doubt that the union has the power and resources to get its measure in the November election.
“They have money… we’ll see,” he said. “There is a lot of influence in this… However, someone said to me, ‘It is necessary to oppose this.’ I said, well, I can’t, because it’s not a law. And of course, the legislature does not encourage this. “
“It’s just an issue, even though, to me, it’s been an issue we’ve been discussing for five or six months,” Newsom said. “I have contacted its promoter directly, indirectly, my employees always work with someone who represents this. I have met people who feel that they are being attacked because of that, people who have no problem paying extra income tax. People who spend all their money but want to do it in the timeline that their family has approved of it… I have met them all, and they are all in different stages of their lives, their jobs and their abundance and some will never spend a cent, some I respect, some I don’t respect.
‘The Bottom Line’ panelists Caroline Downey and Brianna Lyman criticize California Gov. Gavin Newsom’s trip to Davos and sound the alarm over the Democratic governor’s ‘stealth and change’ on ‘The Bottom Line.’
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When asked how he approached this conversation with 200 California billionaires, Newsom said “there are some incredibly enlightened people in that category, and some people put a mask on them.”
“I think they’re disappointed in a way, too. I mean, it’s a lot of anxiety out there,” Newsom noted. “That’s why we’re doing more in health care, the huge increase in health care in the country that’s putting pressure on our Medicaid budget — there’s no question about that — to absorb and eliminate that anxiety and stress. But I think this is unfortunate, and we’re going to continue to blame it the other way around.[s].”
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