On Friday, California Governor Gavin Newsom (D) proposed a national billionaire tax as part of what he's calling an “economic reset for America.” The response from Elon Musk was swift, public, and—predictably—a meme.
Musk, the CEO of Tesla Inc. (TSLA) and SpaceX, posted a side-by-side image comparing Newsom to Butt-Head from the cartoon “Beavis and Butt-Head.” It was a classic Musk move: simple, juvenile, and guaranteed to get attention.
Newsom didn't let it slide. He quote-tweeted Musk's post with a retort: “Don't worry, we'll be taxing trillionaires even more. Time to cough up after all that California corporate welfare!”
The exchange is the latest flashpoint in a growing debate over wealth taxes, Silicon Valley's political loyalties, and the Democratic Party's economic agenda. And it's not just Musk and Newsom going at it—other prominent figures have weighed in, turning this into a full-blown public brawl.
What Newsom Actually Proposed
Newsom, widely seen as a potential Democratic contender for the 2028 presidential election, laid out his plan in a Substack post and accompanying video. The centerpiece is a federal minimum tax on billionaires, designed to ensure the wealthiest Americans pay at least the same effective tax rate as their employees.
But that's not all. He also called for closing tax loopholes used by the ultra-wealthy, revising inheritance rules, restoring corporate tax rates to their pre-2017 levels, and creating a national public equity fund so Americans can 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.
Interestingly, 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 flee. “The fight to make the wealthiest Americans pay more in taxes is not one we should be fighting state by state,” he wrote.
Musk, Sacks, and Scaramucci Push Back
Musk's meme was just the opening salvo. The Tesla and SpaceX CEO has a lot at stake here: according to Forbes, his net worth is $946.7 billion, and he became the world's first trillionaire after SpaceX's public debut on June 12. A billionaire tax would hit him directly.
Former White House AI and crypto czar David Sacks also piled on. “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!” Sacks wrote on X.
Then there's Anthony Scaramucci, the former White House Communications Director, who argued that Democrats are shooting themselves in the foot. “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 Newsom's approach.
What This Means
This isn't just a Twitter spat. It's a preview of the political battles to come as the 2028 election cycle heats up. Newsom is positioning himself as a populist Democrat willing to take on the ultra-wealthy, while Musk and his allies are framing the proposal as a threat to innovation and a reason to leave California.
Whether a federal billionaire tax gains traction remains to be seen, but one thing is clear: the debate over wealth inequality is not going away, and the personalities involved are making it anything but boring.
