California Gov. Gavin Newsom has called for a comprehensive overhaul of the American economic system, proposing a “national billionaires’ tax” and a “true economic reset” to prevent the consolidation of inherited wealth.
In a Substack post titled “It’s Time For a National Billionaires’ Tax and a New Social Compact,” Newsom argued that federal, corporate, and inheritance tax codes currently favor a select group of Americans while middle-class costs skyrocket and wages stagnate.
“Just 10% of people in this country own two-thirds of the wealth. A 30-year-old, for the first time in American history, is not doing better than his or her parents. That’s a five-alarm fire,” Newsom wrote.
To address these disparities, the governor proposed a minimum tax on billionaires designed to ensure the wealthiest individuals pay at least the same tax rate as their employees. He also targeted specific financial practices used by the ultra-wealthy, calling for an end to “tax-free lifestyle loans.” Newsom described this practice as a “gimmick that allows the ultra-wealthy to borrow against their stock portfolios while reporting no taxable income.”
Inheritance laws are another major focus of Newsom’s proposed reset. With an estimated $124 trillion expected to pass between generations in the coming years, Newsom argued that the rules must be rewritten so this transfer “doesn’t lock in a permanent American aristocracy of inherited wealth.”
The governor’s platform includes rolling back corporate tax policies by returning to pre-2017 corporate tax rates and closing offshore tax loopholes. Additionally, looking forward to the economic impact of artificial intelligence, Newsom suggested the creation of a national public equity fund to ensure every American owns a piece of the future built by AI.
Newsom explicitly rejected the economic frameworks of past decades, stating that “trickle-down economics has been a nearly 50-year experiment that has failed.” He stated that instead of benefiting the broader public, “record corporate profits flowed into stock buybacks and executive compensation,” adding that “it’s time to stop pretending otherwise.”
Connecting his economic proposals to American history, Newsom noted that the country is approaching the 250th anniversary of its revolution. He argued that the system designed by the founders was meant to prevent the concentration of power, but that the U.S. has allowed that concentration to happen slowly over decades.
Newsom concluded with a call to reverse these wealth trends through collective action, writing, “It’s time to democratize the American economy to save our democracy.”
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