Newsom backs California ballot measure that cancels out billionaire tax proposal

California Gov. Gavin Newsom (D) endorsed a ballot measure that, if approved by voters, would cancel out the ballot measure proposal that would impose a one-time tax on the Golden State’s billionaires.

On Friday, Newsom endorsed Proposition 42, which would prohibit retroactive taxes imposed by Proposition 40, known as the Billionaire Tax Act, for any billionaire who lived in California on Jan. 1, 2026, CalMatters reported .

Proposition 42 was funded by billionaire and Google co-founder Sergey Brin as a means to defeat the billionaire tax, the outlet reported. It would also ban any new taxes on personal property, including pensions and 401K accounts before retirees collect income from them, along with other investments.

“We all agree that Californians deserve to have their retirement and life savings protected from new state taxes so those savings are there when they need them,” Newsom said in a statement released by the proponents of the measure, obtained by CalMatters.

The Billionaire Tax Act would impose a 5 percent tax and allocate 90 percent of the collected tax revenue for healthcare programs and 10 percent for food assistance or education-related programs.

Newsom has long been a vocal opponent of Proposition 50, writing on Substack in June that it is not how California should set its budget priorities. He urged that the U.S. –– not California –– pass a billionaire tax.

“I will continue to oppose the November measure because I believe California’s budget belongs to all Californians, not to any one stakeholder, no matter how worthy the cause,” he wrote. “And I will keep making the case, here and everywhere I can, that the fight against concentrated wealth is a national fight that we have to win soon.”

Proposition 50 qualified for the November ballot in June, exceeding the 962,106 valid signatures expected to back the initiative.

The ballot initiative has divided some California Democrats who argue it could push billionaires out of the state — particularly in Silicon Valley. Brin previously warned that the tax will undermine California businesses and force business leaders out of state.

But the measure has received support from the Service Employees International Union United Healthcare Workers West (SEIU-UHW), one of the measure’s most prominent backers, as well as progressive lawmakers like Rep. Ro Khanna (D-Calif.) and Sen. Bernie Sanders (I-Vt.), who rallied support for the measure in Los Angeles earlier this year.

Proposition 40 saw growing support earlier in the year, but last month’s University of California, Berkeley Citrin Center for Public Opinion Research-POLITICO poll showed that it has a narrow lead from backers. Forty-five percent of registered California voters support the measure, while 43 percent said they oppose it, with 12 percent of respondents saying they are undecided.