Newsom backs initiative against retroactive tax on billionaires — The Hill
California Governor Gavin Newsom has backed Proposition 42, a ballot initiative that would prohibit the retroactive taxation of billionaires envisioned by another state proposal. If approved by voters, the restriction would apply to billionaires who lived in California as of January 1, 2026.
What Proposition 42 provides for
As The Hill reports, Proposition 42 was funded by Google co-founder Sergey Brin. The initiative also provides for a ban on new taxes on personal property, including retirement savings and 401(k) accounts, until retirees receive income from these assets, as well as on other investments.
In a statement circulated by the initiative's supporters, Newsom said that Californians' savings for retirement and everyday needs should be protected from new state taxes so that people can use these funds when needed.
More current news is available on the UA.News Telegram channel Telegram.
Dispute over the tax
The initiative, known as the Billionaire Tax Act, provides for a one-time 5% tax. Ninety percent of the funds collected are proposed to be directed to healthcare programs, while another 10% would go to food assistance or educational programs.
Newsom had previously opposed the tax initiative. In June, he wrote that California should not determine budget priorities in this way, while calling for a tax on billionaires to be introduced at the national level in the United States.
The initiative has divided California Democrats: some believe it could prompt billionaires to leave the state, especially Silicon Valley. Brin previously warned that the tax would harm California businesses and force company executives to relocate. At the same time, the initiative was supported by the SEIU-UHW union, Congressman Ro Khanna, and Senator Bernie Sanders. According to a poll by the UC Berkeley Citrin Center for Public Opinion Research and POLITICO, 45% of registered California voters supported the tax, 43% opposed it, and 12% were undecided.
