Even Democrats are turning against Newsom.
California Governor Gavin Newsom is facing an unusual wave of criticism—not from Republicans, but from members of his own party—as a growing dispute over taxing billionaires exposes deep divisions among Democrats ahead of the 2028 presidential election.
The clash centers on Newsom’s decision to support the idea of a national billionaire tax while opposing a similar proposal in California, a position that has prompted fellow Democrats to accuse him of political double standards.
Representative Ro Khanna of California emerged as one of Newsom’s sharpest critics during a Friday news conference, arguing that the governor cannot claim to support taxing the wealthiest Americans while refusing to back a comparable measure in his own state.
“You can’t say you support these policies nationally while avoiding the debate in California,” Khanna said, arguing that Newsom is attempting to sidestep a politically difficult fight.
Democrats Turn On Newsom
The disagreement has become one of the most public Democratic feuds in recent months.
Newsom opposes California’s proposed one-time 5% tax on billionaires, warning that such a measure could encourage wealthy individuals and businesses to leave the state, weakening California’s economy over time.
Instead, the governor argues that higher taxes on the nation’s wealthiest Americans should be handled by Congress rather than through individual states.
“The fight to make the wealthiest Americans pay more in taxes is not one we should be fighting state by state,” Newsom said Friday while unveiling his national proposal.
His comments came after California leaders failed to reach an agreement before the deadline to remove the state tax measure from November’s ballot.
Khanna Calls Newsom’s Proposal Misleading
Khanna rejected Newsom’s approach, accusing the governor of offering voters a political talking point instead of a genuine billionaire tax.
According to Khanna, Newsom’s federal proposal focuses on taxing loans backed by investment assets rather than imposing a traditional wealth tax on billionaires.
He argued that the plan would generate only a fraction of the revenue supporters believe is needed and claimed it reflects the preferences of wealthy technology executives rather than working Americans.
Khanna also suggested the dispute represents a defining moment for the Democratic Party as it decides whether to prioritize the interests of wealthy donors or middle-class families.
A Battle That Could Shape 2028
The political stakes extend far beyond California.
Newsom is widely viewed as a leading contender for the Democratic presidential nomination in 2028, while Khanna has also been mentioned as a possible White House candidate.
Their disagreement over tax policy is increasingly being viewed as an early battle over the future direction of the Democratic Party.
Political analysts say Newsom is attempting to balance two competing political realities. He must appeal to progressive voters who favor higher taxes on the wealthy while also maintaining relationships with influential business leaders and major campaign donors.
Political communications professor Dan Schnur said Newsom’s strategy allows him to argue that he supports a billionaire tax in principle while distancing himself from California’s specific proposal.
In effect, Schnur suggested, the governor’s message is simple: he supports taxing billionaires—but not this particular plan.
Billionaire Tax Fight Heads to California Voters
The California ballot initiative is expected to become one of the state’s most closely watched political battles this year, with supporters and opponents preparing to spend tens of millions of dollars—or more—to influence voters.
Supporters argue the one-time tax would help offset reductions in federal health care funding and preserve medical coverage for millions of Californians.
Dave Regan, president of SEIU-United Healthcare Workers West, dismissed warnings that wealthy residents would leave California if the proposal passes. He argued that voters are ready to ask the state’s richest residents to make a one-time contribution to help stabilize California’s health care system.
Opponents, including Newsom, continue to warn that even a one-time billionaire tax could make California less competitive and encourage high-income taxpayers to relocate to states with lower taxes.
Why the Debate Matters
The fight has highlighted growing disagreements within the Democratic Party over taxes, government spending, and economic policy.
For Republicans and many fiscal conservatives, Newsom’s opposition to California’s proposal echoes a longstanding argument that aggressive state tax increases can drive investment, businesses, and high-income residents elsewhere.
For progressive Democrats, however, the California measure represents a test of whether the party is willing to require its wealthiest supporters to contribute more toward public services.
With California voters expected to decide the issue in November, the outcome could shape not only state policy but also the national political conversation—and potentially the ambitions of Democrats looking ahead to the 2028 presidential race.
