Newsom proposes federal billionaire tax amid fight over state measure

Gov. Gavin Newsom, who's been a firm opponent of California's so-called "billionaire tax," said he would support a national wealth tax on billionaires, promoting it as a real solution to the wealth inequality facing the country.

Newsom has long argued that the proposed California Billionaire Tax Act, a one-time tax that would raise an estimated $100 billion through a 5% "wealth" tax on roughly 200 California billionaires, is riddled with flaws and fails to address the underlying issue of the ultra-wealthy. The tax measure officially qualified for California's November ballot, state officials said earlier this month.

One of his main arguments is that the money raised by the taxes would primarily go to the state's health care, ignoring other aspects of government such as education and housing. Additionally, he notes that because the tax would apply only in California, it would incentivize ultra-wealthy Californians to move to other states such as Texas and Florida.

Newsom, who could possibly run for the presidency in 2028, argued in a Substack blog posted on Friday, June 26 that in order to address the issue of wealth inequality, the country needs to create a "new social contract" and address loopholes in the federal tax code.

"When 10% of the people in this country own two-thirds of the wealth, when we have minted the first trillionaire in human history, and yet your wages have stagnated, and your healthcare costs have skyrocketed, something is fundamentally broken," Newsom said in his blog.

"A 30-year-old, for the first time in American history is not doing better than his or her parents. That's a five alarm fire."

In his blog post, Newsom lays out his proposals for tackling this issue, which would be to create a new "true minimum tax on billionaires - a modern Buffett Rule."

The Buffett Rule stems from a tax plan proposed by former President Barack Obama that would apply a minimum tax rate of 30% to individuals making more than $1 million a year. The plan ultimately failed to pass after it was blocked by Senate Republicans in April 2012.

Newsom did not provide specific details of what minimum tax rate he would propose.

Additionally, a major focus of Newsom's proposal was what he characterized as the "private tax code full of loopholes and exemptions" that the wealthy use to fund their "tax-free" lifestyles, as well as the need to return to a "pre-2017" corporate tax rate and address the country's inheritance rules.

He argued that if these rules continue to play out the way they're currently written, the country could see "a permanent American aristocracy of inherited wealth, with all the political consequences the founders warned us about."

"It's time for an economic reset," Newsom said. "We should end the 'tax-free lifestyle loan,' the gimmick that lets the ultra-wealthy borrow against their stock portfolios while reporting no taxable income, and then pass the appreciated assets to their children with the gains untaxed."

Newsom also highlights in his proposal the fundamental economic change that will stem from the advancement of artificial intelligence. He argues that to ensure all American "own a piece of the future it builds," the U.S. government take equity stakes in major tech companies by creating a national public equity fund.

"If we do act, it becomes a once-in-a-century chance to renew the American Dream by funding universal child care, making higher education and career training free, funding healthcare, and making a down payment on a real industrial policy for the AI century," Newsom said in his post.

Noe Padilla is a Northern California Reporter for USA Today. Contact him at npadilla@usatodayco.com, follow him on X @1NoePadilla or on Bluesky @noepadilla.bsky.social. Sign up for the TODAY Californian newsletter or follow us on Facebook at TODAY Californian.

This article originally appeared on USA TODAY: Newsom proposes federal billionaire tax amid fight over state measure

Reporting by Noe Padilla, USA TODAY / USA TODAY

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This story was originally published June 26, 2026 at 1:12 PM.