Wealth Tax News – 7/2/2026

This week’s wealth tax coverage was dominated by Gov. Newsom’s call for a national “billionaires tax” while reiterating his opposition to California’s state-level ballot measure—a stance widely criticized across the political spectrum as inconsistent political positioning ahead of a potential 2028 presidential run.

Commentary focused on constitutional barriers to a federal wealth tax, the practical risks of capital flight and revenue loss from the California proposal, and the growing split among business leaders and tech figures over whether the state measure would drive innovation elsewhere or be absorbed without lasting harm. In Washington, an initiative to repeal the state’s 9.9% millionaire tax awaits signature verification, with a parallel lawsuit also challenging the tax on constitutional grounds.

Please find summaries of relevant articles with web links below. Please reach out to any member of your Brownstein National Tax Policy Group team with questions or to set up a meeting.

California Wealth Tax Initiative 2026: Latest Polls – The New York Times
The New York Times has set up a page on their website tracking recent polling on the California wealth tax proposal. We will regularly include this in future editions of our updates.

California

Gavin Newsom calls for national billionaires tax: ‘Economic reset’ – CNBC
Gov. Newsom called for a nationwide “billionaires tax” as part of a broader “economic reset.” He is proposing a minimum tax on the ultra-wealthy, closing loopholes like “buy, borrow, die,” returning corporate tax rates to pre-2017 levels, revising inheritance rules, and creating a national public equity fund tied to AI-driven growth. While positioning the agenda as helping working Americans and signaling potential 2028 presidential ambitions, Gov. Newsom reiterated his opposition to the wealth tax proposal imposing a state-level wealth tax, while arguing that such policies are ineffective at the state level because wealthy individuals can relocate and that the issue should be addressed federally.

The Founders Wouldn’t Back a ‘Billionaire Tax’ – WSJ
Jonathon Turley, a law professor at George Washington University’s Law School, argued that Gov. Newsom’s call for a national “billionaire tax” misunderstands the Founders’ intent, asserting that Madison, Locke, and other key figures designed the constitutional system to limit concentrations of political power, not wealth. He argues that the Founders’ intent also protected private property through mechanisms like the Fifth Amendment’s Takings Clause. Turley argues that a federal wealth tax would be unconstitutional as a direct tax on property, criticizes Gov. Newsom for using founders’ rhetoric to justify redistribution while opposing California’s own wealth tax proposal due to wealth flight and fiscal strain. He warns that progressive strategies such as court-packing and wealth taxes could gradually expand from billionaires to ordinary property owners in a way that reflects “Mamdanian,” not Madisonian, democracy.

The Socialist Wave, West Coast Version – WSJ
The Wall Street Journal Editorial Board argued that Gov. Newsom is trying to straddle a line between Silicon Valley donors and an upcoming socialist left by opposing California’s ballot wealth tax while endorsing a national one. The Board frames the national tax as inconsistent with the Founders despite constitutional concerns about wealth taxes as direct takings of property. The Board faults him for refusing to seriously confront unions pushing the state measure, suggests the state tax would harm entrepreneurship without fixing budget problems rooted in spending, and warns that his effort to appease the socialist wing may backfire politically as that faction grows more assertive.

Newsom’s political chops will be tested by wealth tax fight – Orange County Register
The Editorial Board argues that Gov. Newsom is trying to balance political pressures as he opposes the wealth tax proposal ballot measure backed by SEIU-UHW while simultaneously endorsing the idea of a national billionaire tax to maintain credibility with the political left ahead of a potential 2028 presidential run. The Board criticizes both the union’s proposal, calling it poorly designed, overly targeted toward healthcare spending, and likely to drive wealthy residents out of the state, and Newsom’s positioning. The Board suggests his objections are more about control over how revenues are allocated than about principle. The board ultimately supports rejecting the ballot measure and frames the situation as a test of Newsom’s political maneuvering.

Opinion | Gavin Newsom’s wealth tax two-step – The Washington Post (Gift Link)
The Washington Post Editorial Board criticized Gov. Newsom for what it portrays as an inconsistent “two-step” on wealth taxes, opposing a California ballot measure while advocating for a national version, arguing that if such a tax is flawed at the state level, it would be even more problematic federally. The Board argues that wealth taxes are ineffective, difficult to administer, and have largely failed in other countries, while also raising constitutional concerns about a federal wealth tax as a direct tax. It further suggests Gov. Newsom’s proposal broadens beyond billionaires to target a wider group of high earners and frames his stance as politically motivated positioning ahead of a potential presidential run rather than sound economic policy.

Heidi Heitkamp on the wealth tax: It’s no surprise that Gov. Gavin Newsom opposes it in California – CNBC
Former Sen. Heidi Heitkamp (D-ND) and former White House Chief of Staff Mick Mulvaney underscored that “wealth tax” is an imprecise label covering very different concept, ranging from personal‑property‑style taxes on net worth to unrealized gains, and that none of the national proposals have been fleshed out enough to resolve major legal and administrative questions. Sen. Heitkamp argued that it is unsurprising Gov. Newsom opposes a California-only wealth tax because mobile capital and high‑net‑worth residents can simply leave. Mulvaney frames Newsom’s call for a federal billionaire tax as political positioning that lets him appeal to progressives without harming his state’s competitiveness. Both emphasize that extreme wealth concentration is a real problem but suggest more targeted reforms such as closing tax loopholes or rebalancing spending and revenue, which may be more practical and durable than broad, constitutionally complicated wealth taxes.

Business Leaders React to California’s Wealth Tax Proposal – Business Insider
California’s wealth tax proposal has triggered a sharp split among high-profile business leaders and tech figures. Some are threatening or already moving assets and residency out of the state while others downplay the impact. Critics such as Bill Ackman, Ben Horowitz, Palmer Luckey, and more argue the wealth tax is effectively expropriation, would hit illiquid “paper billionaires,” push founders to prioritize short-term profit, and accelerate capital and talent flight to places like Texas, Florida, Austin, and Miami. Supporters like Rep. Ro Khanna (D-CA) and Nvidia CEO Jensen Huang argue innovation will persist because of California’s talent base and that modest wealth taxation can help address inequality and fund healthcare.

Will California’s Billionaire Tax Be Paid By Non-Billionaires Too? – Forbes
California’s wealth tax proposal will likely be felt well beyond the small group of ultra‑rich targets, with potential costs and risks borne by ordinary Californians as well. Expert revenue estimates conflict wildly, and the article notes that, once capital flight is modeled, some analyses suggest the state could lose net tax revenue rather than gain it. Administering and litigating a complex wealth tax would be expensive and difficult, and it could accelerate corporate and high‑earner relocations and deter future investment, ultimately forcing higher taxes or diminished job opportunities for non‑billionaires.

The Wealth Tax Is Popular but Faces Serious Obstacles – Jacobin
Conor Lynch argues that while a wealth tax on billionaires has become increasingly popular amid and growing public anger over oligarchic power, enacting such a tax at the federal level faces steep political and constitutional barriers. It traces emerging proposals from Sen. Bernie Sanders (I-VT), Rep. Khanna, Sen. Elizabeth Warren (D-MA), and others and notes how exploding top-end wealth has expanded their revenue potential. Lynch emphasizes that passage would require unlikely congressional majorities and then surviving a Supreme Court that is hostile to expansive tax powers. Much of the discussion centers on the Constitution’s “apportionment” requirement for direct taxes and the conservative Court’s likely view that a straightforward national wealth tax, or even an unrealized gains tax, would be unconstitutional, suggesting advocates may either need complex workarounds or accept a confrontational strategy that forces the Court to strike down a popular reform and potentially invites a longer-term backlash.

How will proposed California billionaire tax affect Miami? – Miami Herald
California’s wealth tax proposal is influencing high‑end migration patterns and generating keen interest among Miami‑area luxury brokers and developers. Some South Florida real estate agents expect the measure to push more ultra‑rich Californians toward low‑tax Florida and have already seen increased inquiries and purchases by tech and finance billionaires. Experts caution that changing residency is complex and the tax is retroactive to where billionaires lived on January 1, 2026, limiting how much an after‑the‑fact move to Miami can actually shield them.

Washington

WA won’t know if millionaire tax repeal bid qualifies until after July 2 – King 5
Washington officials will not know until after July 2 whether an initiative to repeal the state’s millionaire tax has qualified for the November ballot. The Secretary of State must first receive petitions, count pages and signatures, and then validate them. The measure titled “an Initiative Prohibiting Individual Income Taxes,” needs about 309,000 valid signatures (with sponsors aiming for roughly 400,000 to account for invalid ones). There is also a parallel legal challenge by a coalition, Let’s Go Washington, including former state officials who have sued to overturn the millionaire tax on constitutional grounds, arguing Washington precedent treats income as property that must be taxed uniformly.