Gavin Newsom trapped between Democrats, billionaires over tax ballot fight | Opinion
Gov. Gavin Newsom is staring at a nightmare scenario for the twilight of his tenure in office. Unless he can somehow convince the backers of the billionaires tax to pull the initiative from the November ballot, he’s in for a politically miserable summer and fall.
In his opposition to this tax, Newsom has far more in common with the state’s Republicans than the members of his own party. That’s an uncomfortable place to be for someone who is thinking of running for president.
Absent some compromise in the coming hours, the proposed one-time, 5% tax on the wealth of the state’s billionaires can be certified Thursday by California’s secretary of state for the November ballot.
When it comes to this proposed tax, there is a striking difference between Californians who identify with the Democratic Party and those who want to lead it as governor. The chief executive has to worry about balancing a $350 billion state budget. Voters, not so much.
About 72% of California Democrats support this tax, according to a March survey by the UC Berkeley Institute of Governmental Studies that was sponsored by the Los Angeles Times. In perfect symmetry, 72% of Republicans opposed it. Overall, support stood at 52%, the kind of slim majority that can trigger intense campaigning between now and Election Day.
“I’m very mindful as the guy who budgets for this state that we rely on a very small number of people who allow us to do very historic things,” Newsom said back in January. He is worried about a budget headache of epic proportions, an exodus of a handful of Californians that would trigger a sea of red ink in Sacramento.
Newsom is absolutely right and hardly alone. Every major Democrat running for governor in this primary opposed this tax, save for the one who hasn’t served a minute in public office in his life, billionaire Tom Steyer.
Backers of the initiative last week sent Newsom a letter with a counteroffer, suggesting he support a one-time 2% tax on the state’s billionaires instead. The initiative is being led by the SEIU United Healthcare Workers West.
Most of the spending from the initiative would go toward, you guessed it, healthcare. Backers are promoting it as vital funding to close the gap caused by a reduction in federal spending enacted by the Republican Congress and the Trump administration.
“A 2% wealth tax on the state’s richest 200 billionaires will provide a critically important two-year bridge,” backers wrote in the letter to Newsom. “Two years gives California time for the next governor to work with stakeholders and the Legislature toward a longer-term, more comprehensive solution to the healthcare crisis manufactured by Trump.”
Newsom and Democrats who run the California Legislature have not taken action on this counter-proposal for an understandable reason: California taxing the wealth of billionaires more than the rest of the nation has its risks for the state budget.
Absent some last-minute deal that tries to save political face for all involved, it is Newsom’s duty as our governor to follow through and fight this proposal to preserve state finances for his successor. Yet like any savvy politician, he doesn’t like to be associated with the losing side.
Take, for example, how, in 2024, he opposed Proposition 36 that increased penalties for repeat petty theft offenses and repeat fentanyl users refusing treatment. But as poll after poll showed it would pass overwhelmingly, he wasn’t exactly the face of the opposition on the campaign trail.
Meanwhile, in the nation’s Democratic Party, a soul-searching is underway to define how to address the growing gap between the rich and those disadvantaged by the modern economy. On tax reforms, the party is increasingly divided between its left and centrist/establishment factions.
Amid this populist revolt among Democrats, it’s not the best time for Newsom to be defending a bunch of billionaires back in California. But this could be his fate.
It is quite the thorny political predicament. It is also a defining moment of principle.