California Governor Gavin Newsom has criticised a proposed state wealth tax, warning it could drive billionaires and investment out of California.
Newsom said reports of wealthy residents preparing to leave the state validated his long-standing opposition to the proposal.
This is my fear, it’s just what I warned against, it’s happening.
Gavin Newsom said.
The proposal, backed by a healthcare workers’ union, would impose a 5% tax on the assets of billionaires.
Newsom said he has spent months privately urging the union to abandon the initiative.
He argued that wealth taxes may warrant debate at a national level but are damaging at a state level.
We live in a competitive reality with 49 other states.
Gavin Newsom said.
Supporters of the tax say it is needed to offset budget pressures caused by President Donald Trump’s tax policies.
Progressive groups argue the measure would help reduce economic inequality.
Backers must still gather nearly 900,000 signatures to place the proposal on the November ballot.
Several wealthy Californians, including major technology investors, have reportedly moved business interests out of the state.
The measure would apply retroactively to billionaires residing in California at the start of the year.
Newsom said the structure of the proposal would generate one-off revenue rather than sustainable funding.
It makes no sense and it’s really damaging to the state.
Gavin Newsom said.
He warned the proposal could undermine start-ups and long-term economic confidence.
Newsom said the issue was an unwelcome distraction in his final year as governor.
He recently raised more than $100 million for a separate redistricting ballot measure.
I think it will be defeated because people understand what it does versus what it claims to do.
Gavin Newsom said.