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Not only has Gov. Gavin Newsom vocally opposed the proposed California billionaire tax, but he also wants to prevent the state from ever passing a wealth tax in the future.
On Friday he endorsed Proposition 42, a ballot measure that would cancel out Proposition 40, the proposed billionaire tax. Prop. 42 would prohibit retroactive taxes like the one-time 5% tax on assets that would apply to any billionaire who lived in California on Jan. 1, 2026 if Prop. 40 passes.
But Prop. 42, funded and placed on the ballot by billionaire and Google co-founder Sergey Brin to defeat the billionaire tax, also would go further, by banning any new taxes on personal property.
That includes pensions and 401K accounts before retirees start drawing retirement income from them. It also includes other investments, financial assets, business holdings, art collections and all other forms of personal wealth that would be affected by the billionaire tax or any future wealth tax.
Newsom’s decision to support Prop. 42 runs counter to his own Democratic Party and some labor unions. It also aligns him with some of the wealthy tech donors with whom he’s maintained longstanding relationships dating back to his days as mayor of San Francisco.
Proponents primarily argue that middle-class workers’ retirements and pension accounts should never be taxed as assets before the gains are later taxed a second time as income, even though there is no such proposal. Lawmakers have in the past proposed asset taxes but those bills went nowhere in the Legislature and any tax would require a two-thirds majority to pass. The proposed billionaire tax also exempts many kinds of retirement accounts.
“We all agree that Californians deserve to have their retirement and life savings protected from new state taxes so those savings are there when they need them,” Newsom said in a statement released by the proponents, who also include police and fire unions.
Proponents of the tax criticized his Prop. 42 endorsement as “in lock step with his billionaire backers.”
“By voting yes on Prop 42, he’s showing California his true colors,” said Debru Carthan, vice president of Service Employees International Union-United Healthcare Workers West in a statement. “He’d rather millions of children and families lose their healthcare than ask a couple hundred billionaires to finally pay their fair share.”
Newsom has not yet taken a position on Prop. 41, another Brin-backed, anti-billionaire measure that would nullify Prop. 40 by subjecting the tax revenues to certain state spending limits and audits, said spokesperson Izzy Gardon. The billionaire tax measure, funded by one healthcare union, would put 90% of the money it collects toward the state’s healthcare program for low-income residents, Medi-Cal.
Newsom, along with many other leading California Democrats and most Republicans, has vocally opposed the billionaire tax and tried to negotiate to keep it off the ballot. In general during his two terms as governor he has opposed state-level taxes on assets, out of concern the wealthy will leave the state and deprive the state of their income tax revenue.
But he has also sought to take advantage this year of a populist upswing and frustration toward tech billionaires ahead of his decision on whether to run for president after he leaves office. The California Democratic Party endorsed the billionaire tax and polling shows a slim majority of likely voters support it.
In response to the billionaire tax, Newsom this summer announced a proposal to impose a national tax on the wealthy, including a minimum tax rate on anyone with a net worth of more than $100 million. He also wants to undo corporate tax cuts that President Donald Trump and Congress approved in 2017, boost inheritance taxes and close loopholes the wealthy use to borrow from unrealized capital gains without paying income taxes.
Critics from the left have tried to use his Prop. 40 opposition against him. Last weekend as he rallied for the billionaire tax, Democratic California Rep. Ro Khanna, another possible 2028 presidential contender, said donor relations were the “only reason” for Newsom’s opposition.
“You can’t be anti-Trump and then do the bidding of Trump donors,” Khanna said in a video with progressive former congressional candidate Saikat Chakrabarti.
Khanna pointed to Brin, who has never donated to Newsom but has had a relationship with the governor for years. Newsom and Brin attended each other’s weddings. The tech magnate has recently also turned rightward, courting Trump’s favor.
Newsom announced his endorsement of Prop. 42 on Friday along with his positions on most of the 14 ballot measures Californians are deciding on.
He endorsed most measures on the ballot, but opposes Proposition 39, the Republican-backed voter ID measure; Proposition 43, a measure to make it more difficult to pass most local taxes; and Proposition 44, a health union-backed measure to dictate how much money clinics serving low-income patients must spend on patient care.
He hasn’t yet taken a position on Proposition 45, the business-backed measure that puts time limits on the environmental review process for new developments.
