California Gov. Gavin Newsom is pushing a new populist economic message, calling for a national minimum tax on billionaires and a federal fund designed to give all Americans a share of the wealth generated by artificial intelligence. He laid out the proposal Friday in an essay published on Substack.
The proposal comes as Newsom, widely seen as a potential 2028 presidential contender, also said he plans to vote against a billionaire wealth tax appearing on California’s November ballot.
In his essay, Newsom argued that the country needs what he described as a “true minimum tax on billionaires — a modern Buffett rule — that ensures the people at the very top pay at least the tax rate their own workers pay.”
“Today, the office worker can shoulder a higher tax rate than the heiress,” Newsom wrote. “The construction worker could pay a higher rate than the developer. And the delivery driver can end up paying a higher rate than the founder of the company whose packages he delivers.”
Newsom blamed the imbalance on a tax structure shaped by “decades of loopholes written by lobbyists and upheld by politicians who knew exactly who they worked for.”
“But this system can be undone,” he added.
His opposition to the California measure is rooted in a broader argument about where such a fight should be waged. The union-backed state billionaire tax qualified for the California ballot one day before Newsom’s essay was published, but the governor contends that taxing the ultrawealthy should be handled by Washington, not individual states. Billionaires, he argued, can move to avoid a single state’s tax system, making the federal government the proper arena “where this broken system was created in the first place.”
Some of California’s richest tech figures may already be positioning themselves for that possibility. Mark Zuckerberg, Larry Page and Sergey Brin are among the billionaires who have been purchasing homes in Florida, a state with no income tax, as the Los Angeles Times reported.
Newsom also objects to the California billionaire tax because the revenues would mainly be used to fund state spending on Medicaid, and not on other needs.
“It ignores our public schools,” Newsom wrote, and said the California proposal would also overlook women’s health clinics, housing and child care.
He maintains that it’s the Legislature that should be making decisions about California’s budget, not a single stakeholder, “no matter how worthy the cause.”
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Newsom’s federal billionaire tax proposal
Newsom suggests ending what he calls the “tax-free lifestyle loan” — the practice adopted by many billionaires of borrowing against stock holdings, reporting no taxable income, then passing the appreciated assets to heirs untaxed.
He calls for rewriting inheritance rules ahead of a generational wealth transfer over the next two decades, citing a figure of $124 trillion, which he warns could lock in “a permanent American aristocracy of inherited wealth.”
Newsom would also like to see a return to corporate tax rates that were in place before the 2017 Trump tax cuts and the closing of offshore loopholes that let multinationals shift profits on paper, he said.
He called “trickle-down economics” a 50-year-long “failed” experiment that funneled record profits into buybacks and executive pay while workers’ wages stagnated.
Newsom proposes a national public equity fund that would take a major stake in the AI economy. Revenues would help fund transitions for workers displaced by AI. His plan would help fund severance, portable benefits and enhanced unemployment insurance. The broader program would underwrite universal child care, tuition-free higher education and career training, health care and an industrial policy for what he calls the “AI century.”
Newsom, who is term-limited and set to leave office in January 2027, is widely viewed as an early frontrunner for the 2028 Democratic presidential nomination, and his proposals place him squarely in his party’s debate over AI and economic insecurity — two of the biggest issues in this year’s midterm election cycle. A YouGov/Economist survey this month found 71% of Americans — including 77% of Democrats and 68% of Republicans — said AI is developing too fast.
