This year Gavin Newsom has shown that he would be a billionaire-friendly president. Which means he shouldn’t be president at all. In short order, we will all have a huge field of Democratic presidential hopefuls to keep up with, but Newsom has done us a favor and disqualified himself before he even formally launches his expected campaign.
Newsom has aligned himself with the uberwealthy on two major fronts. He has strongly opposed a ballot initiative that would impose a one-time 5 percent tax on the assets of California billionaires. The measure would almost certainly pass if it had vocal backing from Democratic politicians in the state. But lacking that support, polls suggest it might fail. In addition, Newsom pushed Attorney General Rob Bonta and other Democratic attorneys to cut a deal with David Ellison (son of Oracle co-founder Larry Ellison) and his company Skydance, instead of continuing litigation to stop or stall Skydance’s acquisition of Warner Bros. Discovery. Newsom’s public wariness about the attorney generals taking a tough line against the merger inspired other California Democratic politicians to adopt the same stance, undercutting the leverage of Bonta and his colleagues. The attorney generals ended up dropping their opposition to the merger after a few minor concessions from Ellison and his firm.
Newsom has cast these moves as being in the interests of his state’s residents. After all, Ellison threatened to move Paramount’s headquarters away from California unless Bonta and the other attorneys general blessed the merger, potentially costing thousands of Californians their jobs. (Ellison’s Skydance acquired Paramount last year.) Newsom and other critics of the billionaire tax say it would raise money initially but ultimately would rob California of revenue, as the superrich leave the state en masse.
In reality, the economic case for the governor’s stances isn’t clear-cut. Sure, Ellison isn’t moving Paramount’s headquarters from California for now, but I would expect the company’s workforce in the Bay State to be drastically reduced in the next few years. That’s what companies that merge do—claim redundancies and lay off thousands of people. Ellison has already written a memo to employees of the newly merged company hinting at significant job cuts to come.
Also, we should consider the economic effects for Californians (and other Americans) who aren’t employees at Paramount’s headquarters. Will the costs and options for people who watch movies, streaming television, and other products offered by Paramount and Warner Bros. Discovery get better or worse now that a rival company has been removed from the market? I predict worse. Will actors, television writers, and others in the entertainment industry get more or fewer opportunities with one less competitor for their services? I would bet on fewer.
In terms of the billionaires’ tax, I have no doubt some billionaires would move. But there have been numerous studies of the effects of increased taxes on superrich individuals. They often don’t back up their threats to move. Their homes, families, country clubs, and other cherished possessions are still in the place where they made their money. California has great weather and is the center of numerous industries. All the billionaires there aren’t going to flee.
And the specifics in California make the case for the proposed wealth tax even stronger. California billionaires pay a tax rate of about 0.2 percent on their wealth each year, according to an analysis from economists Jasper Boll, Emmanuel Saez, and Gabriel Zucman. That’s significantly less than the proposed tax. “Even if one fourth of all billionaires left, it would take 100 years for the income tax loss to match the revenue from the wealth tax. In the extreme case where all billionaires left, it would take 25 years for the income tax loss to match the revenue from the tax,” the economists say.
But while the economics here are at least a bit complicated, the democratic implications are not. They are simply terrible. Ellison put Bari Weiss in charge of CBS News, where she has both shifted the network decidedly to the right and forced out many of the company’s top journalists after they wouldn’t abide by her Trump-friendly direction for the network. By acquiring Warner Bros. Discovery, Ellison now controls CNN, perhaps an even more important news institution in today’s America than CBS. Ellison is letting current CNN editor in chief and chairman Mark Thompson remain in his post, instead of bringing in Weiss or one of her allies to run the network. But that shouldn’t reassure anyone. Thompson and everyone else at CNN have seen how Weiss has run CBS with Ellison’s blessing. They have to assume his journalism vision is pro-Israel, anti-anti-Trump, and pro-billionaire. CNN employees are likely to self-censor to avoid drawing Ellison’s ire.
Yes, I know that fewer Americans watch television news than ever. But outlets like CNN and CBS still matter, because they have reputations and brands that carry a lot of weight, as well as large, experienced staffs whose coverage influences what shows up on social media. What stories about the antidemocratic tendencies of Trump and the Republicans won’t be covered by CNN because of Ellison’s leadership? (Remember that Weiss initially blocked a 60 Minutes report on the horrible conditions in a prison in El Salvador where the Trump administration sent immigrants from Venezuela.) What negative stories about Trump will be whitewashed? How negatively will Democrats skeptical of Israel be covered? (In Ellison’s defense, CNN anchors Dana Bash and Jake Tapper in particular are already quite hostile to critics of Israel and don’t need their new boss to push them there.)
It is shocking and incredibly stupid that one of the most prominent politicians in a pro-democracy party has helped allies of an authoritarian acquire a major news outlet. Has Newsom not studied how autocrats across the world censor critical content by ensuring media is owned by people friendly to them? Has he not seen how Ellison and Weiss have led CBS?
And it’s not just CNN. HBO, TNT, and numerous media properties are part of Warner Bros. Discovery and therefore now Ellison’s empire. The movie Sinners was distributed by Warner Bros. Pictures; John Oliver’s show Last Week Tonight airs on HBO. A wide array of anti-racist, progressive, pro-democracy content and personnel is now under the thumb of Ellison. I predict that Ellison and his team will either block some of that content or force it to be more pro-Trump, or at least less anti-Trump. Has Newsom not considered this, or does he consider his (likely misplaced) hopes of saving a few thousand California jobs more important?
The billionaire tax doesn’t just raise revenue. It’s a way to both underscore the prodigious, excessive wealth of billionaires in the United States today and limit their ability to use their wealth to influence politics. One of the main reasons our democracy is eroding is the alliance between right-wing politicians and billionaires like Elon Musk. And there is finally a grassroots movement to confront the oligarchy, best illustrated by the nationwide, bipartisan resistance to AI data centers. This ballot initiative being defeated in California, one of the most liberal states in the country, would be a huge blow to that movement.
That’s why it’s so galling and, again, stupid for Newsom, one of the most prominent Democrats in the country, to be joining the effort to kill the wealth tax.
Why is Newsom doing the billionaires’ work for them? The main reason is probably ideology. He’s a typical California establishment Democrat. Such Democrats, including Kamala Harris and Nancy Pelosi, tend to be generically “liberal” and supportive of gay rights and abortion rights. But they often aren’t progressive on economic issues, especially when it comes to challenging corporate power and the wealthy.
Secondly, there’s 2028. Many of the superrich don’t like the current Republican Party but are also wary of progressive Democrats and greater regulations on corporations. They would love a Democratic Party led by a billionaire-friendly figure and might pump in tens of millions of dollars to boost such a candidate during the primary. If Newsom is auditioning for anti-MAGA millionaires and billionaires, his moves this year help him.
So, either Newsom doesn’t appreciate the danger of billionaires and mega companies, or does understand it but is ignoring all of that to help his presidential campaign. I’m not sure which explanation for his moves is the correct one. I also don’t care. Either way, Newsom has shown, even before he officially declares his presidential candidacy, that he isn’t the right person to lead the Democratic Party. Maybe that was already obvious. Remember that Newsom’s first major move after Trump won a second term was to yuck it up with Charlie Kirk and Steve Bannon on the governor’s podcast. Newsom has bad political instincts, and as his pro-billionaire moves show, he’s terrible on policy too. Democrats who were considering him as a 2028 candidate should have one word for the California governor: Next!
