California Gov. Gavin Newsom’s support for a nationwide billionaire tax is drawing ridicule from fellow Democrats who are backing a one-time version of the tax in his own state, among them Rep. Ro Khanna.
Speaking with reporters Friday, Khanna sharply criticized Newsom for what he called “flip-flopping,” accusing the governor of promoting a federal tax plan while resisting a California ballot measure that would ask voters to approve a one-time 5% levy.
“You can’t hypothetically say I support policies on a national level while ducking the fight in your own state, which is defining for the entire nation, and saying, ‘Well, I don’t want to upset the billionaires in my state, so I’m just going to punt this and say, hypothetically, we can solve something at a federal level,” Khanna said.
Newsom has rejected the California proposal, warning that it could damage the state’s economy over time by prompting wealthy residents to relocate elsewhere. On Friday, he argued that “the fight to make the wealthiest Americans pay more in taxes is not one we should be fighting state by state.”
After a Thursday deadline passed without a deal to keep the tax measure off the ballot, Newsom pivoted to a national proposal he said would help “democratize” the economy.
The governor’s embrace of a federal wealth-tax framework carries added political weight because he is broadly viewed as a possible 2028 presidential contender. Khanna is also seen as a potential candidate, making their dispute over taxes and other policy divides an early glimpse of a possible Democratic primary clash.
Dave Regan, president of SEIU-United Healthcare Workers West, the union sponsoring the California measure, appeared alongside Khanna and disputed Newsom’s concerns, saying predictions of “capital flight” from the state tax are unfounded.
Khanna, who has been working to position himself as a progressive voice ahead of any potential White House run, said Newsom’s announcement amounted to misleading “propaganda.”
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“The proposal with respect to what Governor Newsom has proposed federally is not a wealth tax,” Khanna said. “Taxing the loans on assets is something that the tech oligarchs themselves have proposed, because that will raise a fraction of the revenue of an actual wealth tax.”
The congressman said the tax fight exemplifies a crucial point in the future of the Democratic Party. He and others supporting the tax have slammed Newsom for siding with billionaires.
“I believe this is the defining fight on what side you’re on on this issue, for whether you’re an economic populist or whether you’re going to be for the working class or whether you’re still with the donor class of our party,” Khanna said.
“The reality is that what happens in California is going to determine the course of what happens in this country on this issue,” he added.
Political observers say Newsom’s latest move is him trying to play a fine line in appealing to the far left electorate for a presidential bid while also still maintaining the support of wealthy tech billionaire donors such as Ron Conway.
“Given that it’s going to be on the November ballot, this is the best possible alternative message for him to follow,” Dan Schnur, a professor of political communications at USC, told The Post. “‘I am for a billionaire tax — just not this one.’”
The state’s one-time tax measure is expected to generate a costly election fight that could climb to tens — if not hundreds — of millions, and it could shape Newsom’s presidential ambitions given he has vowed to defeat it.
Supporters of the tax said it’s needed to help make up federal cuts to health care.
“We believe Californians are ready to say that the most fortunate and the wealthiest people among us can put forth a modest one time 5% tax, so that millions and millions and millions of people will continue to have at least a stable health insurance system,” Regan said.
