California Governor Gavin Newsom, whose early ventures were notably supported by billionaire Gordon Getty, now faces a complex political challenge regarding a proposed tax measure that would target the very wealth such support helped cultivate. Newsom’s initial success in business arose during the 1990s with the establishment of PlumpJack, a wine store in San Francisco, launched with substantial financial assistance from Getty, an oil tycoon and long-standing family acquaintance. Getty’s continued investment in Newsom’s growing empire of wineries, restaurants, and hotel properties contributed significantly to Newsom’s accumulation of multimillionaire status prior to his entry into statewide politics.
Despite this privileged financial foundation, Newsom’s upbringing was marked by challenges, notably the divorce of his parents. He and his sister were predominantly brought up by their mother, who balanced several jobs to maintain their household. This background of both wealth association and personal struggle shapes Newsom’s nuanced position on the current fiscal proposal.
The core of the present debate revolves around the 2026 Billionaire Tax Act, a ballot initiative propelled by robust support from a leading health care workers' union. This measure proposes a one-time, 5% tax on net assets exceeding $1 billion for California residents, with payments to be made incrementally over a span of several years. Advocates for the tax argue that it could generate tens of billions of dollars in new revenue, earmarked for enhancing public services and mitigating the state’s growing economic disparities.
However, Governor Newsom has publicly denounced the tax as "bad economics," emphasizing concerns that the levy could induce capital flight and unsettle California’s state budget, which is significantly dependent on high-income taxpayers. In a detailed conversation with a major publication, Newsom observed that even the announcement of the tax initiative has precipitated movement among affluent residents seeking to leave California. Independent reporting has identified that no fewer than six billionaires have reportedly relocated from the state following news of the proposed tax.
The opposition to the tax extends into influential circles within Silicon Valley’s entrepreneurial and investment community. Venture capitalist Chamath Palihapitiya and hedge fund manager Bill Ackman have publicly criticized the tax, framing it as detrimental to innovation and economic growth. Further intensifying resistance, Palantir’s chairman Peter Thiel has contributed approximately $3 million to organizations campaigning against the tax. Anticipated additional largescale donations from Silicon Valley executives are expected to bolster the opposition effort.
Notably, eminent figures such as Google co-founders Larry Page and Sergey Brin are among those reportedly severing or lessening their financial ties to California, reflecting broader concerns about the tax’s impact on the state’s economic landscape.
The proposed initiative faces a significant procedural hurdle, necessitating the collection of nearly 900,000 signatures to secure placement on the November ballot, marking a critical phase in its potential enactment.