# California Billionaire Tax Splits Newsom from Democratic Socialists

- URL: https://twotakes.us/stories/california-billionaire-tax-splits-newsom-from-democratic-socialists
- Published: 2026-11-05T02:09:35.737670+00:00
- Topics: wealth-tax, california-politics, proposition-40, billionaires, healthcare-funding

## What the left says
- A one-time 5% tax on roughly 200 billionaires could generate tens of billions of dollars to offset federal Medicaid cuts and protect Medi-Cal coverage for low-income Californians, seniors, and people with disabilities.
- Wealth concentrated among billionaires in stocks, art, and intellectual property should contribute to public needs like healthcare, food assistance, and education rather than remaining shielded from taxation.
- Applying the tax retroactively to residents as of January 2026 is meant to prevent wealthy individuals from dodging responsibility by fleeing the state right before the measure takes effect.
- Newsom's opposition reflects a more cautious, incremental approach to taxing wealth, while the measure's progressive backers see bolder redistribution as necessary given the scale of the healthcare funding gap.

## What the right says
- A 5% wealth tax targeting billionaires risks driving high-net-worth individuals and the businesses they run out of California, eroding the state's tax base over time.
- Taxing unrealized wealth in assets like businesses, securities, and collectibles rather than actual income sets a troubling precedent for government overreach into private assets.
- Even Governor Newsom, a Democrat, recognized the policy's economic risks and backed a competing measure to stop it, suggesting the tax is too radical even within his own party.
- The measure reflects a socialist redistributive philosophy that assumes wealth was taken from the wrong pockets rather than legitimately earned, a framing many reject as punitive toward success.

## Common ground
- California faces a significant funding shortfall for Medi-Cal, estimated as high as $100 billion, following federal healthcare funding cuts.
- The proposition would apply specifically to roughly 200 billionaires with assets exceeding $1 billion, not the broader population.
- Early returns show the measure trailing, with about 56% voting no versus 44% voting yes as of midweek counting.
- Both sides recognize the policy has sparked a genuine rift among Democrats, pitting Gov. Newsom against progressive and socialist advocacy groups.

## Sources
- [ABC News](https://abcnews.com/Business/billionaire-tax-californias-prop-40/story?id=137805474) (Lean Left)
- [Forbes](https://www.forbes.com/sites/zacharyfolk/2026/11/02/billionaire-max-levchin-says-he-will-probably-leave-california-if-wealth-tax-passes/) (Lean Right)
- [Fox News](https://www.foxnews.com/politics/newsom-breaks-socialists-over-billionaire-tax-california-voters-appear-poised-reject) (Right)

---
Content by TwoTakes (https://twotakes.us). You may quote, summarize and cite it, including in AI answers, as long as you credit TwoTakes and link the story URL. Original reporting belongs to the linked outlets. Summaries are AI-assisted and reviewed for balance; check the original sources for authoritative reporting.