Ro Khanna lays into Gavin Newsom’s tax proposal, setting up 2028 battle lines
Rep. Ro Khanna slammed Gov. Gavin Newsom’s national tax proposal on Friday, accusing the fellow Democrat of being a “cheerleader for the billionaire class” by refusing to back a proposed wealth tax on California’s billionaires.
The two California Democrats and rumored 2028 presidential hopefuls are on opposite sides of the California Billionaire Tax Act, a proposed one-time, 5% tax on billionaires’ wealth sponsored by the SEIU - United Healthcare Workers West that’s set to appear on voters’ ballots this November.
Khanna, D-Fremont, embraced the measure in December, making him an outlier among top California Democrats who’ve been wary of the way the tax is set up. That camp is led by Newsom, who argues the California proposal would endanger the state’s long term fiscal health and wouldn’t do enough for causes beyond healthcare, which is set to receive 90% of revenues the tax generates.
Until now, Khanna avoided directly attacking Newsom on the issue. But in a hastily called virtual press conference Friday, the Silicon Valley progressive said Newsom’s new proposal for a national billionaire tax was too narrow and came too late.
The governor’s calls for closing what Newsom called a “lifestyle loan loophole”—loans ultrawealthy take out against their assets that help minimize their tax liability—doesn’t go nearly far enough, Khanna said. He argued the governor’s plan failed to address the healthcare cuts caused by the Republican megabill signed by President Donald Trump last year and would raise a small fraction of the revenue of a true wealth tax.
“It’s a gulf of difference between me and the governor, and it’s the difference between standing up for three million in Californians who are losing healthcare, or standing for the billionaire class,” Khanna said. “This is a defining difference for the Democratic Party.”
Khanna and Sen. Bernie Sanders, D-Vermont, introduced legislation in March that would enact a 5% wealth tax on U.S. billionaires, with revenues going to payouts of $3,000 per person for households making $150,000 or less.
Newsom laid his plan for what he called a national billionaires’ tax on Friday. It came the morning after negotiations brokered by his office failed to convince SEIU-UHW’s polarizing president, Dave Regan, to remove the California measure ahead of Thursday’s deadline.
In addition to taxing the “lifestyle loan,” Newsom called for rewriting inheritance taxes, closing corporate and offshore tax loopholes, and creating a “national public equity fund” that uses stakes in AI companies to fund job retraining and enhanced unemployment benefits.
“We can’t let a single advocacy organization, however well-intentioned, write the state’s tax code on its own terms,” Newsom wrote. “The fight belongs at the federal level, where this broken system was created in the first place.”
An array of groups has lined up against the wealth tax. They include traditional liberal Newsom allies like the California Teachers Association, business groups like the California Business Roundtable, and billionaires like Google co-founder Sergey Brin. Some are already running ads against the initiative.
The wealth tax has so far been a lonelier coalition driven by Regan, Khanna and Sanders. But on the call Friday, Regan said he expected “an overwhelming number of California unions, and frankly unions from around the country, are going to support this billionaire tax.”
A spokesperson for Newsom did not immediately respond to a request for comment.
This story was originally published June 26, 2026 at 4:27 PM with the headline "Ro Khanna lays into Gavin Newsom’s tax proposal, setting up 2028 battle lines."
