California Wealth Tax Would Cause Rich to Flee, Newsom Warns (1)

California Governor Gavin Newsom warned that a proposed one-time tax on billionaires will backfire by prompting the ultra-rich to leave the state.

“The impact of a one-time tax does not solve an ongoing structural challenge,” Newsom said Thursday at a Bloomberg event in San Francisco. “You would have a windfall one time and then over the years you would see a significant reduction in taxes because taxpayers will move.”

The potential levy has divided populist Democrats from the party’s more moderate faction — a camp Newsom has increasingly been associated with. Progressives including Vermont Senator Bernie Sanders and California Congressman ...