Governor Gavin Newsom Cautions Against Proposed Wealth Tax Impacting California’s Economy
‘The Big Money Show’ panel reacts to billionaires fleeing California as Gov. Gavin Newsom’s proposed wealth tax sparks backlash and red state migration.
California Governor Gavin Newsom has recently acknowledged that the state’s proposed wealth tax is “bad economics.” His concerns come in light of reports indicating that some of California’s wealthiest residents are relocating their money and businesses out of the state. Newsom warns that this measure could damage the economy and deter investment.
In a POLITICO interview, Newsom expressed his fears, stating, “This is my fear. It’s just what I warned against. It’s happening.” He elaborated on the tangible impacts, noting that the consequences extend beyond immediate revenue loss to include the potential for startups to reconsider long-term commitments in California. “That’s not what we need right now, at a time of so much uncertainty,” he added.
The proposed wealth tax, which has yet to qualify for the November 2026 ballot, is backed by the Service Employees International Union–United Healthcare Workers West. It would impose a one-time 5% tax on the net worth of California residents with assets exceeding $1 billion, due in 2027. Taxpayers would have the option to spread payments over five years, with interest, as outlined by the Legislative Analyst’s Office.
California Gov. Gavin Newsom speaks during a rally on November 8, 2025, in Houston, Texas. (Getty Images)
If the measure is approved by voters, it would apply to anyone who was a California resident on January 1, 2026. This provision has prompted several high-profile business figures and billionaires to relocate or restructure their holdings outside the state.
Among them is Google co-founder Larry Page, who has reportedly moved several business entities out of California and purchased two Miami properties valued at approximately $73.4 million. Oracle chairman Larry Ellison also sold his San Francisco mansion for around $45 million, while other notable figures like Sergey Brin and Peter Thiel have shifted some business operations out of California.
California Congressman Darrell Issa discusses reports that as many as 20 billionaires could leave the state amid concerns over a proposed new wealth tax which critics say is driving high-net-worth taxpayers out of California on ‘The Evening Edit.’
Despite his support for a progressive tax structure, Newsom has criticized the billionaire tax, stating it “makes no sense” and is “really damaging to the state.” He expressed his desire to focus on a specific agenda while remaining pragmatic about unforeseen challenges. “This is not how I wanted to spend my last year,” he remarked.
Newsom remains optimistic about the overwhelming opposition to the proposed tax, believing it will ultimately be defeated as people recognize its implications. A spokesperson for Newsom previously indicated that the governor opposes “state-level wealth taxes” due to their tendency to drive affluent residents away. At the New York Times DealBook Summit in December 2025, he reiterated the importance of California’s competitive environment, emphasizing that states cannot isolate themselves from the rest of the nation regarding tax policy.
‘The Big Money Show’ panel reacts to billionaires fleeing California as Gov. Gavin Newsom’s proposed wealth tax sparks backlash and red state migration.
California Governor Gavin Newsom has recently acknowledged that the state’s proposed wealth tax is “bad economics.” His concerns come in light of reports indicating that some of California’s wealthiest residents are relocating their money and businesses out of the state. Newsom warns that this measure could damage the economy and deter investment.
In a POLITICO interview, Newsom expressed his fears, stating, “This is my fear. It’s just what I warned against. It’s happening.” He elaborated on the tangible impacts, noting that the consequences extend beyond immediate revenue loss to include the potential for startups to reconsider long-term commitments in California. “That’s not what we need right now, at a time of so much uncertainty,” he added.
The proposed wealth tax, which has yet to qualify for the November 2026 ballot, is backed by the Service Employees International Union–United Healthcare Workers West. It would impose a one-time 5% tax on the net worth of California residents with assets exceeding $1 billion, due in 2027. Taxpayers would have the option to spread payments over five years, with interest, as outlined by the Legislative Analyst’s Office.
California Gov. Gavin Newsom speaks during a rally on November 8, 2025, in Houston, Texas. (Getty Images)
If the measure is approved by voters, it would apply to anyone who was a California resident on January 1, 2026. This provision has prompted several high-profile business figures and billionaires to relocate or restructure their holdings outside the state.
Among them is Google co-founder Larry Page, who has reportedly moved several business entities out of California and purchased two Miami properties valued at approximately $73.4 million. Oracle chairman Larry Ellison also sold his San Francisco mansion for around $45 million, while other notable figures like Sergey Brin and Peter Thiel have shifted some business operations out of California.
California Congressman Darrell Issa discusses reports that as many as 20 billionaires could leave the state amid concerns over a proposed new wealth tax which critics say is driving high-net-worth taxpayers out of California on ‘The Evening Edit.’
Despite his support for a progressive tax structure, Newsom has criticized the billionaire tax, stating it “makes no sense” and is “really damaging to the state.” He expressed his desire to focus on a specific agenda while remaining pragmatic about unforeseen challenges. “This is not how I wanted to spend my last year,” he remarked.
Newsom remains optimistic about the overwhelming opposition to the proposed tax, believing it will ultimately be defeated as people recognize its implications. A spokesperson for Newsom previously indicated that the governor opposes “state-level wealth taxes” due to their tendency to drive affluent residents away. At the New York Times DealBook Summit in December 2025, he reiterated the importance of California’s competitive environment, emphasizing that states cannot isolate themselves from the rest of the nation regarding tax policy.
