Gavin Newsom’s billionaire tax two-step: squeeze the rich nationally, spare California’s donor class

Gov. Gavin Newsom is trying to sell America on a national billionaire tax as he cultivates a likely White House run in 2028 — but his critics say California’s sky-high tax record has already sent many residents fleeing and Newsom is scrambling to protect his gilded Golden State donor class.

The governor’s new proposal “reveals more about Gavin Newsom’s political future than California’s future,” said a spokesperson for the California Assembly GOP.

“At a time when Californians are struggling with affordability,” officials added, “Governor Newsom is solely focused on rolling out a national agenda to distract from more than seven years of failed leadership at home.”

The governor introduced a national billionaire tax plan Friday morning, less than a day after his office failed to block a state wealth tax going to California voters in November. The measure is seeking to levy a one-time, 5% tax on billionaires to cover healthcare costs in the state. 

Newsom’s office was aggressive in its pursuit to block the state billionaire tax, launching a chilling pressure campaign on political organizations in the state to fall in line, a source with knowledge of the matter told The Post.

Dave Regan, the head of SEIU-United Healthcare Workers West, which is leading the state billionaire tax effort, said Newsom’s office “responded very quickly, and they rejected our efforts” on a compromise to lower the tax to 2%.

By Friday, the governor had already pivoted to roll out an alternative plan that notably tacks to the left.

The governor is arguing that a national billionaire tax, which would face substantial hurdles in passing through Congress, could help fund universal child care and healthcare, as well as free college and career training.

“Newsom is going for the big government socialist vote,” said John McLaughlin, CEO of McLaughlin & Associates and a pollster for The Post. 

“He’s losing to [former Vice President Kamala] Harris in our national monthly poll of Democrat primary voters.”

A messy and expensive political fight over a state wealth tax could climb to tens — if not hundreds — of millions, and it could sink or propel Newsom’s unquenched presidential ambitions.

The California billionaire-tax proposal, backed by labor and progressive groups, has been pitched as a way to raise money for health care cuts made in President Trump and Republicans’ “Big Beautiful Bill,” HR 1. 

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Opponents of a state and national billionaire tax say it will worsen California’s already bruising reputation among high earners, investors and business owners.

“Just as the California wealth tax proposal already prompted targeted individuals to leave the state, a national wealth tax would lead to wealthy individuals leaving the United States and taking their tax dollars, investments, and philanthropic activities with them,” the California Taxpayers Association said in a statement to The Post.

“When that happens, there will be more tax hikes aimed at the rest of us to make up for the lost revenue.” 

Dan Schnur, a professor of political communications at USC and UC Berkeley, said that Newsom’s announcement was “a very savvy political tactic,” but it comes with risks.

The governor will need to avoid sounding like he is defending Silicon Valley billionaires like Sergey Brin, who has spent tens of millions on his own competing measure, Peter Thiel, and Newsom’s own wealthy billionaire donors, such as Ron Conway and Chris Larsen.

“Given that it’s going to be on the November ballot, this is the best possible alternative message for him to follow,” Schnur said. “‘I am for a billionaire tax — just not this one.’”

A campaign against the state measure will likely give Newsom the ability to raise millions of dollars to once again lift his platform, as he did with the 2021 recall effort and last year’s Proposition 50 gerrymandering fight.

Newsom emerged victorious in both of those ballot measure clashes, but, in each case, he framed President Trump and Republicans as his electoral adversaries. Newsom will now be arguing against a tax on billionaires while trying to present himself nationally as a champion of taxing the ultra-rich.

He could find himself in a political hornet’s nest as he tries to court progressive Democrats and deep-pocketed donors.

“The argument he’s been making up until now about chasing billionaires out of California — you’re not going to hear that message in the fall,” Schnur said.

“The campaign will frame this not as an argument on behalf of billionaires, but on behalf of schools and public safety and reproductive rights.”

So, Newsom is now fighting for and against taxing billionaires at the same time. That’s rich.