FOX Business Host Cheryl Casone reports on California's controversial billionaire tax. a one-time 5% levy on residents worth over $1 billion. This measure, which would retroactively apply from January 1, 2026, is opposed by Gov. Gavin Newsom. Critics question its legality and potential for billionaires to exit the state.
California Democratic Gov.Gavin Newsomis facing another blow after a massive wealth tax he warned could cause a wealth. business exodus from the state was officially added to the November ballot.
Despite his opposition. the measure's sponsor, Billionaire Tax Now, announced Thursday that it was officially being added to the state's ballot. The measure. called the California Billionaire Tax Act, would impose a one-time, "emergency" 5% tax on Californians with assets exceeding $1 billion. The tax has been endorsed by socialist Sen.Bernie Sanders, I-Vt., who called it "reasonable. necessary" "at a time of unprecedented and growing wealth consolidation and income inequality."
However, Newsom, a rumored frontrunner for theDemocratic Party’s presidential nomination, has come out strongly against the tax, citing fears that billionaires will simply up. leave to states like Texas or Florida.
In a lengthySubstack poston the tax. Newsom wrote, "Last night, it became certain that a wealth tax would be placed on the November ballot in California. I’m voting no."
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California Democratic Gov. Gavin Newsom has come out strongly against a proposed state billionaire tax while pushing a similar national tax.(Carlin Stiehl / Los Angeles Times via Getty Images)
"You may not be able to pick up. move to Texas or Florida to shelter your income from taxation, but I promise you that billionaires can, and do," he wrote, adding, "Wealth is movable, and it shops for the state with the lowest taxes."
In a state that has already lost prominent business figures such asElon Musk, Google co-founder Larry Page. Oracle founder Larry Ellison, Newsom is not the only one warning that the billionaire tax could worsen California's ongoing exodus.
Earlier this year, Silicon Valley tech entrepreneur Allison Huynhpredicted in an interviewwith Fox News Digital that the tax would cause a "mass migration," starting with "not just the billionaires,. the people who are investing in new ideas, in new infrastructure, whether it's AI, healthcare, tech, robotics."
Huynh likened the proposed tax hike to a restaurant about to go out of business.
"Instead of lowering the price, they increase the price," she said. "And then you go into the restaurant, and it's like $50 for a bowl of really bad dumplings."
Fox News Digital reached out to Billionaire Tax Now for comment.
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Sen. Bernie Sanders, I-Vt., endorsed the California billionaire tax.(Sarah Rice/Getty Images)
After news of the measure being added to the ballot broke, Newsom called on the U.S. to institute a national billionaire tax and what he referred to as "a new social contract."
In an X post, Newsom wrote that "the system is fundamentally broken. The federal tax code, a corporate code, and an inheritance code were written for a different set of Americans. It’s time for an economic reset."
In his Substack post. he argued "the fight to make the wealthiest Americans pay more in taxes is not one we should be fighting state by state." Instead, he wrote, "The fight belongs at the federal level, where this broken system was created in the first place."
In January, Newsom said he felt vindicated in opposing the proposed wealth tax after reports showed some of California's wealthiest residents moving money. businesses out of the state, warning the measure woulddamage the economyand drive away investment.
"This is my fear," Newsom said in a Politico interview on Monday. "It’s just what I warned against. It’s happening."
"The evidence is in. The impacts are very real — not just substantive economic impacts in terms of the revenue,. start-ups, the indirect impacts of … people questioning long-term commitments, medium-term commitments," he continued. "That’s not what we need right now, at a time of so much uncertainty. Quite the contrary."
Despite Newsom's opposition. the group behind the tax effort — Billionaire Tax Now, sponsored by the Service Employees International Union – United Healthcare Workers West — proceeded to add it to the ballot.
The union posits that the tax will "prevent the collapse of California healthcare. help fund California public K-14 education and state food assistance programs."
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California Gov. Gavin Newsom delivers his final state budget plan at the Capitol Annex Swing Space in Sacramento on May 14. 2026.(Gabrielle Lurie/San Francisco Chronicle via Getty Images)
Billionaire Tax Now is confident the measure will pass, posting on X that "while a few controversial billionaires. their buddies in Sacramento want to seeCalifornia’s hospitals close and tax breaks for billionaires protected - popular support is on our side."
Meanwhile. some of Newsom’s detractors claim that his opposition to the measure is driven by a desire to appeal to potential presidential donors.
Billionaire Tax Now reposted an X post by David Sirota. founder of the progressive investigative news outlet The Lever, in which he asserted that "Gavin Newsom is trying to protect 250 prospective 2028 presidential donors, even if that means 3 million of his constituents are medically bankrupted."
Reached for comment, Newsom's office directed Fox News Digital to his Substack and video.
Peter Pinedo is a politics writer for Fox News Digital.
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