California Governor Gavin Newsom called on the federal government to implement a national tax on billionaires and to acquire ownership stakes in artificial intelligence companies as part of a broader effort to address wealth inequality and perceived threats to democracy. The proposals were detailed in a post published Friday on the platform Substack.
Newsom, a Democrat weighing a presidential bid as his current term nears its conclusion, positioned his agenda as a response to what he described as the “elite concentration of wealth and power” undermining American democracy. The governor argued that tax policy reforms should occur at the federal level rather than state-by-state, warning against proposals targeting wealthy individuals at the state level.
His announcements came one day after a major California health care union announced plans to advance a ballot measure that would impose a one-time 5% tax on the assets of billionaires residing in California as of January 1, 2026. Newsom has expressed opposition to that measure, which some progressive groups also reject, out of concern it could prompt billionaires to leave California, thereby diminishing the state’s long-term tax base despite generating revenue in the short term. California is home to hundreds of billionaires, the most of any state.
Newsom emphasized the mobility of wealth, noting that billionaires can relocate to states with lower taxes. He proposed a minimum tax on individuals with net worth exceeding $100 million and called for a ban on borrowing against stock portfolios to fund lifestyles without taxation. Inheritance tax reforms are also part of his agenda, citing the risk of establishing a permanent aristocracy through wealth transfer. Additionally, Newsom advocates raising corporate tax rates to levels preceding the 2017 tax cuts.
Linking his proposals to technological disruption, Newsom highlighted the impact of artificial intelligence on employment and wealth concentration. To ensure broad-based participation in the AI-driven economy, he suggested creating a publicly held national equity fund that would provide every American a stake in the economic future shaped by AI.
Funds generated from these initiatives, Newsom said, could support worker retraining, universal child care, tuition-free college, and expanded health care funding.
The governor’s focus on wealth taxation departs from his previous moderate tax positions and reflects a shift within Democratic politics, contrasting with earlier efforts such as Senator Elizabeth Warren’s unsuccessful 2020 campaign centered on a wealth tax.
Newsom characterized the U.S. tax system as skewed to favor the wealthy, stating that economic influence enables rule changes that perpetuate inequality, thereby straining the foundations of democracy.
Responding to Newsom’s proposals, U.S. Representative Ro Khanna of Silicon Valley, also a potential presidential candidate, criticized the governor for avoiding a direct confrontation with California’s wealth tax ballot measure. Khanna endorsed the state-level proposal and argued that Newsom’s national approach was insufficiently robust in addressing billionaires’ wealth.