California Governor Gavin Newsom rejected his state's ballot measure to tax billionaires, then promptly released his own national wealth tax proposal Friday, signaling where his political calculation stands as he eyes a 2028 presidential run.
The governor laid out an ambitious agenda in a Substack post and accompanying video that would impose a minimum tax on billionaires and those worth at least $100 million, while establishing a public equity fund giving all Americans a slice of the artificial intelligence industry. The plan also includes provisions to close tax loopholes exploited by the ultra-wealthy.
Newsom framed the proposal in sweeping terms, citing wealth concentration that leaves the typical American struggling. "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," he wrote. He sketched a portrait of a rigged system where "money buys influence, and influence rewrites the rules" that funnel wealth upward, ultimately weakening democracy itself.
The timing reveals the political tightrope Newsom walks. His opposition to California's own billionaire tax initiative, which would impose a one-time 5% levy on assets exceeding $1.1 billion and direct 90% of revenue to healthcare, runs counter to his national proposal. Newsom's stated objection centers on how the state would spend the money rather than the tax itself.
He's not alone in that skepticism. Xavier Becerra, the former U.S. health secretary and leading candidate to succeed Newsom as California governor, also opposes the state measure. Yet other prominent Democrats back it, including Rep. Ro Khanna, another potential 2028 contender, and Tom Steyer, a billionaire and activist who just lost a gubernatorial bid.
The split within the Democratic establishment reflects larger party tensions. The base increasingly demands action on wealth inequality as inflation pressures household budgets on groceries and fuel. Potential presidential hopefuls recognize that addressing inequality resonates with voters.
The AI equity fund component of Newsom's proposal targets a different anxiety altogether. As artificial intelligence accelerates job displacement, Newsom argues every American deserves ownership in the emerging economy. "As artificial intelligence reshapes the country, every American should own a piece of the future it builds," he wrote, framing the equity stake as compensation for workers whose livelihoods AI threatens.
Newsom's move suggests he believes a sweeping national vision polls better with Democrats than defending a local ballot defeat. By staking out ambitious territory on wealth taxes and AI regulation before other 2028 candidates fully define themselves, he tries to own the populist economic lane heading into the next cycle.
Author Sarah Mitchell: "Newsom just turned a California loss into a national platform move, but his opposition to his own state's wealth tax measure will haunt him in a Democratic primary."
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