On Friday, Gov. Gavin Newsom’s (D-Calif.) call for a national billionaire tax sparked a public clash with Tesla Inc. (NASDAQ:TSLA) and Space Exploration Technologies Corp. (NASDAQ:SPCX) CEO Elon Musk, adding fuel to an increasingly heated debate over wealth taxes, Silicon Valley and the Democratic Party’s economic agenda.
Gavin Newsom Unveils ‘Economic Reset’ Centered On Billionaire Tax
Newsom, who is widely viewed as a potential Democratic contender for the 2028 presidential election, on Friday proposed what he described as an “economic reset for America” in a Substack post and accompanying video.
The governor backed a federal minimum tax on billionaires, arguing that the wealthiest Americans should pay at least the same effective tax rate as their employees.
He also called for closing tax loopholes used by ultra-wealthy individuals, revising inheritance rules, restoring corporate tax rates to their pre-2017 levels and creating a national public equity fund to ensure Americans share in AI-driven economic gains.
“They did everything right, and the system still has nothing for them,” Newsom wrote, arguing that the current tax code disproportionately benefits the wealthiest Americans.
Despite supporting a federal billionaire tax, Newsom reiterated his opposition to California’s proposed one-time 5% wealth tax on billionaires, arguing that taxing wealth state by state would encourage wealthy residents to relocate.
“The fight to make the wealthiest Americans pay more in taxes is not one we should be fighting state by state,” he wrote.
Elon Musk, David Sacks And Anthony Scaramucci Push Back
Musk responded by posting a side-by-side image comparing Newsom to Butt-Head, the cartoon character from “Beavis and Butt-Head,” mocking the governor’s proposal.
Newsom shared Musk’s post and replied: “Don’t worry, we’ll be taxing trillionaires even more. Time to cough up after all that California corporate welfare!”
Musk currently has a net worth of $946.7 billion, according to Forbes. He became the world’s first trillionaire after SpaceX’s public debut on June 12.
Former White House AI and crypto czar David Sacks also criticized Newsom.
He took to X and said, “Today was the day that Gavin Newsom was supposed to save the tech industry by cutting a deal to kill the Billionaire Tax Act. Instead, he came out as DSA-adjacent… See y’all in Texas!”
Meanwhile, former White House Communications Director Anthony Scaramucci argued that Democrats risk hurting their electoral prospects by embracing higher taxes on the wealthy.
“I think the Democrats want the GOP to win the presidency in 2028,” Scaramucci wrote, adding that wealth inequality could be addressed through “way more clever and way more market based ways” than the approach Newsom outlined.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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