Newsom Urges Democrats to Embrace Socialists While Opposing California’s Billionaire Tax

California Governor Gavin Newsom is telling Democrats to welcome democratic socialists into the party — while at the same time blocking a billionaire tax in his own state.

Quick Take

Newsom published a July 4 op-ed calling for a national billionaire tax and an “economic reset,” then said he will vote against California’s own 5% billionaire wealth tax ballot measure.
He says Democrats should be in the “addition, not subtraction” business — meaning the party should embrace, not reject, Democratic Socialists of America candidates.
Critics from both left and right say his national tax push is hollow, pointing to his record of vetoing bills that would have reined in corporate power in healthcare.
Google co-founder Sergey Brin reportedly backed competing ballot measures that could cancel out the California wealth tax, showing how billionaire money fights back against such proposals.

Newsom Calls for National Billionaire Tax — but Fights One at Home

On July 4, 2026, Newsom published an op-ed calling for a national tax on billionaires and what he called a “new social compact.” He proposed making it illegal for the wealthy to borrow against stock portfolios without paying taxes — a move targeting the so-called “buy, borrow, die” strategy used by the ultra-rich. He also proposed a national public fund that would give ordinary Americans a share of gains from the artificial intelligence industry.

At the same time, Newsom said he will vote against California’s own 5% billionaire wealth tax, which is headed for the November ballot. He says the state measure dedicates its revenue too narrowly — only to healthcare — while ignoring housing, childcare, and public universities. He also warned that billionaires might move to lower-tax states like Texas or Florida. Senators Bernie Sanders and Ro Khanna both support the California measure, putting them at odds with Newsom.

The Contradiction Critics Can’t Ignore

Economist Gabriel Zucman has pointed out a key flaw in Newsom’s national plan. Taxing loans taken against assets — his main proposal — would raise only a small fraction of what a true 5% annual wealth tax on billionaires would generate. In other words, Newsom’s plan looks bold but may deliver far less than advertised. Meanwhile, research on past state tax increases shows wealthy residents rarely leave when taxes go up, which undercuts his main reason for opposing the California measure.

Newsom’s record adds to the skepticism. He has vetoed bills to limit private equity’s role in healthcare and to regulate pharmacy benefit managers — industries that drive up costs for working families. His wife’s nonprofit also receives donations from companies he oversees as governor. These facts lead many observers, including voices on the left, to question whether his billionaire tax push is a genuine policy goal or a political move aimed at his widely expected 2028 presidential run.

Democrats and Socialists: “Addition, Not Subtraction”

Newsom has pushed back against establishment Democrats who see the Democratic Socialists of America as a threat to the party. In a video clip from July 2026, he called progressive politics “very healthy” and said the party should focus on growing its coalition rather than pushing people out. Recent Democratic Socialist wins in local and state races appear to have rattled the party establishment, and Newsom’s comments seem aimed at getting ahead of that shift.

Nate Silver Explains How The Democratic Party Has Split Into Three Warring Factions

1) “The Progressive Left” – Zohran, AOC, Bernie, the DSA, this group is the furthest left

2) “The Abundance Libs” – Ezra Klein, Derek Thompson, this group is the most centrist

3) “The… pic.twitter.com/SxuGoftZMa

— The All-In Podcast (@theallinpod) July 7, 2026

Whether Newsom’s outreach to the left is real or strategic, the tension he is navigating reflects a frustration that spans the political spectrum. Millions of Americans — conservative and liberal alike — feel the system is rigged for the wealthy and that elected officials talk a big game while protecting the same donors who fund their campaigns. Newsom’s call for a national billionaire tax while blocking one in his own state fits a familiar pattern: powerful rhetoric, limited action. For voters tired of being told help is coming, that gap is getting harder to ignore.