Newsom opposes the billionaire tax — but he can fight much harder

Gavin Newsom deserves praise for trying to stop the state’s wealth from fleeing — though he should be doing much more.

Newsom has said he opposes the “billionaire tax” ballot initiative, as The California Post has noted. And Politico reported this week that the governor also tried to convince union boss Dave Regan not to pursue it.

Regan has led the SEIU-United Healthcare Workers West for 15 years. He brought his bare-knuckle East Coast tactics to California.

The results have been mixed — even for the workers he represents.

Regan’s specialty, Politico noted in a recent profile, has been filing ballot initiatives as a negotiation tactic.

They cost money to organize, but they also cost money to oppose. And even terrible ideas can pass, if the opposition is weak enough, or complacent.

Newsom has said he opposes the “billionaire tax” ballot initiative. Anadolu via Getty Images

California’s business elites fall into the latter category. They funded progressive politics for years, never imagining that they might eventually become its targets.

Some are organizing efforts to stop Regan’s “billionaire tax,” both by urging people to vote against it, and by proposing “poison pill” ballot initiatives that would prevent the state from spending the tax money.

But other billionaires are voting with their feet, and their money, leaving for friendlier tax climes like Texas and Florida, before the “billionaire tax” even qualifies for the ballot.

The really bad news is that they are not alone.

As The California Post reported, the IRS found that California lost $91.4 billion in revenue from 2019 to 2023 due to people leaving the state.

Many of those leaving are wealthy. But many are also just middle-class Californians who could no longer make ends meet, between high taxes and low affordability.

Newsom appears to understand that, which is why he urged Regan to relent.

But the governor appears to have given up. He should be leading the opposition to the billionaire tax, raising money to oppose it or dipping into his own campaign war chest.

He should be threatening to challenge the “billionaire tax” in court if it passes, or to order the state not to collect the tax.

That’s how Jerry Brown treated Proposition 8, when the state did not want to enforce a new constitutional amendment barring gay marriage.

Newsom has perhaps decided that since he is leaving office, likely to pursue presidential ambitions, the “billionaire tax” is someone else’s problem.

But it should be his fight, as he makes his case to America.

Capital flight isn’t a problem for the rich. It’s a problem for the workers Regan represents.

You can’t create jobs without capital. If no one invests, no one hires.

And even though Regan represents public sector employees, who are paid by taxpayers, the same principle applies.

If revenue leaves the state, there are lower tax receipts, leading to deficits. And when there are deficits, there are cuts to jobs and benefits.

That’s true even in California. Eventually, as Margaret Thatcher said, you run out of other people’s money.

And eventually, even working-class Californians will seek a better life elsewhere.

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