By Anabel Sosa
SFGate, San Francisco
(TNS)
Gov. Gavin Newsom just got behind a ballot initiative that, if passed, would act as a kill switch for Proposition 40, also known as the billionaire wealth tax. The governor’s endorsement comes as the November election is weeks away and the billionaire tax continues to splinter the Democratic Party.
Newsom endorsed Proposition 42, a ballot measure bankrolled by ultrawealthy donors such as billionaire and Google co-founder Sergey Brin, on Friday, writing in a statement that it will protect “blue-collar unions” and other workers’ savings from new state taxes.
“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 his statement provided by the Prop. 42 campaign.
The ballot measure would block new taxes on assets like stocks and other financial property while also banning retroactive taxes, like the proposed billionaire tax. It would not apply to real estate. Both the San Francisco and the statewide Democratic Party have endorsed a no vote on Prop. 42.
Prop. 42 is designed to block Prop. 40: If both measures pass but Prop. 42 earns more yes votes than Prop. 40 then the billionaire tax measure will not go into effect.
Newsom’s statement about protecting Californians’ life savings is repeating a common claim made by opponents of Prop. 40, who have said that the billionaire tax could eventually be expanded to include everyday people’s assets. But CalMatters found that it’s unlikely the billionaire tax would be applied to other taxpayers. The outlet reported that since Prop. 40 would be written into the state’s constitution, any future changes would likely have to be voted on through another ballot measure.
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With an endorsement from Newsom, who as of late September has high approval ratings among Democratic voters, the measure could get a generous boost of support. Polls have consistently found that voters are leaning in favor of Prop. 42.
Brian Marvel, the president of the Peace Officers Research Association of California, who is a supporter of the measure, told SFGATE in an email that there have been multiple attempts to impose taxes on retirement savings and that Prop. 40 is the latest “threat.”
“Whatever happens with Prop 40, Prop 42 gives Californians the long-term protection they deserve,” Marvel wrote.
The billionaire tax is sponsored by the Service Employees International Union-United Healthcare Workers West, a healthcare union that represents around 120,000 workers and patients throughout California, which said that a one-time 5% wealth tax on the state’s 200-plus billionaires will offset healthcare costs slashed under the Trump administration.
Polling shows the billionaire tax is receiving a majority of support from Democratic voters, but the measure is splintering Democratic leadership.
Newsom announced his opposition to Prop. 40 in January, saying a wealth tax would drive the wealthiest residents out of California and leave the state scrambling without the critical tax dollars.
That was around the same time billionaire tech executives like Google co-founders Sergey Brin and Larry Page and former PayPal CEO Peter Thiel announced plans to relocate their residences or businesses out of state in response to the momentum that the wealth tax was gaining. “This is my fear,” Newsom told Politico. “It’s just what I warned against. It’s happening.”
The opponents of wealth taxes often argue that the rich will flee if they face new taxes, but a 2025 study from the Institute for Policy Studies, a progressive group, found that new wealth taxes in Massachusetts and Washington state actually led to an increase in the number of high-income individuals and their net worth, not a drop.
In August, the California Democratic Party bucked Newsom’s opposition by endorsing Prop. 40. Rep. Ro Khanna, a California Democrat who represents Silicon Valley, and Vermont Sen. Bernie Sanders, a staunch progressive and independent who has long advocated for taxing the rich, have both been outspoken supporters of the measure.
Khanna called it a “simple” solution at a rally last week. He said Newsom’s lack of support for the billionaire tax is him falling for that “propaganda.”
“The governor, it’s no secret, wants to run for president. He doesn’t want to offend billionaires who could fund his campaigns,” Khanna said last week. Khanna also added that the billionaires know that Prop. 40 has a chance of winning, so they are “hoping to confuse voters” by promoting Prop. 42.
The San Francisco Democratic Party voted in August to oppose Prop. 40, and other Democrats like San Jose Mayor Matt Mahan and gubernatorial candidate Xavier Becerra have also opposed the measure. Newsom has called for a national tax on the country’s wealthiest, which other Democrats and the healthcare union behind Prop. 40 support.
Prop. 42 has received almost $98 million from Building a Better California, a PAC that has primarily spent its funds trying to block the billionaire tax. Building a Better California has received over $226 million in donations, and that money is going toward a handful ballot measures that the PAC supports and opposes. The biggest funders include $102 million from Brin, around $15 million from former Google CEO Eric Schmidt, around $12.5 million from Ripple co-founder Chris Larsen, $30 million from venture capitalist John Doerr, and $22 million from Stripe CEO Patrick Collison, according to the California secretary of state’s office.
Photo credit: Governor Gavin Newsom/Facebook
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© 2026 SFGate, San Francisco. Visit www.sfgate.com. Distributed by Tribune Content Agency LLC.
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