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In an interview with the NY Times, Newsom said that he has been working 'relentlessly' behind the scenes to kill the proposal.
"This will be defeated — there's no question in my mind," he said of the measure he has long opposed over concerns that it would stifle innovation in the state - as a growing list of tech CEOs have thrown their hands in the air and rage-quit the state over mounting plans to separate them from their wealth.
The plan in question - being driven by the SEIU-United Healthcare Workers West union - would require Californians with a net worth north of $1 billion to pay a one-time tax equal to 5% of their assets, and would apply retroactively to anyone who was living in the state as of Jan 1. Affected taxpayers could spread their payments across five years beginning in 2027.
According to the union, the tax is necessary to make up for deep cuts to health care signed into law last year by President Trump - which include reductions in Medicaid, ACA subsidies, and food subsidies. The union is demanding that California spend 90% of the new tax money on health care, with the rest devoted to food assistance and education.
The union's Chief-of-Staff, Suzanne Jimenez told the Times; "The governor is focused on the wrong problem here," adding "The problem is not just about the preferences of 200 ultrawealthy individuals. The problem is millions will lose health care, and that's really the problem we're trying to solve."
The state's nonpartisan Department of Finance warned in a joint review that the tax would likely deliver tens of billions of dollars in one-time funds for the state, but it could lead to hundreds of millions or more in annual losses from billionaires leaving to avoid the tax.
Notable billionaires who have left California or announced plans to leave include:
Elon Musk
Larry Page
Peter Thiel
David Sacks
Andy Fang (DoorDash Co-founder)
"This is what I feared, and it's come true," Newsom told the Times.
Even Reid Hoffman, co-founder of LinkedIn and a Democratic mega-donor who funds questionable left-wing causes, called out S.E.I.U.-U.H.W's proposed billionaire tax. He wrote on X that this is a "horrendous idea" that might force tech founders and executives to flee the state.