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Gavin Newsom’s anti-Zohran moment: the California billionaires tax

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Gavin Newsom’s stance against California’s proposed “Billionaire Tax Act” has exposed a rift in the Democratic Party, with the erstwhile progressive governor taking a stance on the side of wealth and implicitly against the wing of his party that has claimed billionaires shouldn’t even exist. Where New York City Mayor Zohran Mamdani has built a national profile off an unabashed “tax the rich” message, Newsom is staking out an explicitly anti-wealth-tax position, an important moment with Newsom a presumed frontrunner of the 2028 presidential nomination.​

The fight centers on the 2026 Billionaire Tax Act, a ballot initiative that would impose a one-time 5% levy on the assets of anyone in California worth more than $1 billion, affecting roughly 200 ultrawealthy residents. Unlike an income tax, the measure would require billionaires to tally up their total wealth and cut a big check to Sacramento if voters approve it in November.​

Labor unions and health advocates backing the measure promise tens of billions of dollars for schools, food assistance, and health programs in a state with some of the country’s starkest inequality. Supporters frame it as a one-time recalibration of the social contract, not an annual raid on the rich, and argue that the political energy behind it could serve as a template for other blue states wrestling with similar divides between wealthy coastal enclaves and working-class communities.​

Newsom’s break with the left

Newsom has responded with unusual bluntness, calling the wealth tax “bad economics” and warning that it is already driving a billionaire exodus from California even before voters weigh in. He has publicly vowed the initiative “will be defeated,” signaling he is prepared to campaign against it if it qualifies for the ballot.​

That stance places him in direct conflict with powerful players in his own party, including unions that were central to his 2021 recall survival and national progressives like Sen. Bernie Sanders, who have endorsed the tax as a model for tackling concentrated wealth. Strategists say the clash could define Newsom’s final year as governor and shape his likely 2028 presidential run, forcing him to balance his ties to tech donors with a base that increasingly sees taxing billionaires as a litmus test for serious inequality politics.​

Silicon Valley’s anxiety and escape hatch

In Silicon Valley, the proposal has triggered a full-blown panic among founders and investors who fear it will accelerate an already visible migration of capital and talent out of California. High-profile figures, including Google co-founders Larry Page and Sergey Brin, have moved to reduce their ties or residency in the state ahead of a January 1, 2026 cutoff that could make them retroactively subject to the tax if it passes.​

Business groups, boosted by millions in contributions from tech billionaires such as Peter Thiel, are pouring money into committees fighting the measure and amplifying warnings that the tax would hollow out the state’s innovation hub and shrink long-term income tax revenues. Their argument has given Newsom political cover to cast his opposition as fiscal prudence rather than donor protection, even as critics say he risks cementing California as a sanctuary for the ultrawealthy at the expense of public investment.​

The ‘anti‑Zohran’ contrast

The political contrast with Zohran Mamdani, New York City’s ascendant left-wing mayor, could not be starker. Mamdani has openly declared that “I don’t think we should have billionaires” and made higher taxes on the rich a centerpiece of his platform, pressing for new levies on millionaires and the most profitable corporations as a core “affordability agenda.”​​

Although Mamdani hasn’t backed a billionaires tax like the one proposed in California, or publicly commented on this particular ballot initiative, he campaigned on a 2% city income tax surcharge on incomes over $1 million, targeting roughly 34,000 high‑income New Yorkers. New York Gov. Kathy Hochul, an increasingly close Mamdani ally, has ruled out broad tax hikes.

To be sure, Mamdani has shown signs that his politics will be less radical in practice than they seemed on the campaign. Famously, his November White House visit with President Donald Trump shocked left and right alike, as the two seemingly opposed figures largely got along and have reportedly been texting each other since.

A party split down the middle

The California fight encapsulates a broader argument roiling Democrats over whether confronting inequality requires directly taxing accumulated wealth or prioritizing growth and investment incentives. On one side stand unions, Sanders-style progressives, and officials in the Mamdani mold who view billionaire wealth as both a moral scandal and an untapped revenue source; on the other are pro‑business Democrats like Newsom who worry that aggressive wealth taxes will backfire economically and politically.​

As signatures are gathered and money pours in from both sides, the Billionaire Tax Act is becoming more than a state-level skirmish; it is evolving into a proxy fight over the future of Democratic economic policy in the post‑Biden era. For Newsom, the gamble is clear: staking his national ambitions on the bet that a Democratic Party skeptical of billionaires will still accept a nominee who killed a billionaire tax in his own state.

The importance of affluent donors

Over the past few decades, wealth and political power have concentrated sharply at the top, with the political giving of the 100 richest Americans surging more than 100-fold since 2000 and far outpacing the rising cost of campaigns. Court decisions such as the 2010 Citizens United ruling and the growth of super PACs have enabled billionaires to spend hundreds of millions of dollars per cycle, often shaping primaries, underwriting issue campaigns, and increasingly backing Donald Trump’s GOP in 2024 and beyond.

Newsom has long been a favorite of affluent donors, drawing support from a set of elite San Francisco families — including branches of the Getty, Pritzker, and Fisher fortunes — who have collectively steered tens of millions of dollars to his campaigns over more than two decades. During the 2021 recall fight, Newsom also attracted high-profile billionaire support from Netflix co-founder Reed Hastings, and agribusiness magnates Stewart and Lynda Resnick.

If Newsom were to mount a presidential bid, many of these billionaires — especially Hastings and members of the Getty and Pritzker families — would be natural early financiers, given their long record of underwriting his rise and their alignment with his pro-business, socially liberal brand of Democratic politics. More broadly, Newsom’s ties to California’s tech and donor class, including figures like former Google CEO Erik Schmidt, who has backed him in state races, position him to tap into the same West Coast mega-donor network that has increasingly defined the Democratic Party’s financial backbone in national contests.

For this story, Fortune journalists used generative AI as a research tool. An editor verified the accuracy of the information before publishing.



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Trump claims all the U.S. automakers are ‘doing great.’ Gretchen Whitmer says ‘this will only get worse without a serious shift’

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Michigan Gov. Gretchen Whitmer offered a contrasting view of manufacturing in Detroit Thursday, two days after President Donald Trump defended his tariff strategy in the Motor City.

Whitmer, a term-limited Democrat who is in her last year as governor, said in a speech at the Detroit Auto Show that the administration’s tariff strategy has hurt American auto manufacturing and is benefiting Chinese competitors. It’s a message she has repeated over the past year as economic uncertainty has rippled across the automobile sector.

“This will only get worse without a serious shift in national policy,” Whitmer said.

Her remarks followed Trump’s speech defending his economic policy Tuesday in Detroit, a major hub of automobile manufacturing. He also toured the factory floor of a Ford plant in Dearborn.

“All U.S. automakers are doing great,” Trump said.

Whitmer offered a differing picture of the impact, saying that American manufacturing has contracted for months leading to job loss and production cuts. She has remained firmly opposed to Trump’s tariff strategy since last year, especially as her state partners closely with Canadian business. Automobile parts often cross the U.S.-Canadian border several times in the assembly process.

“America stands more alone than she has in decades,” Whitmer said. “And perhaps no industry has seen more change and been more impacted than our auto industry.”

The White House did not immediately respond to a request for comment on Whitmer’s speech.

Whitmer has kept a more cordial relationship with Trump in his second term compared to his first. The relationship included a few White House visits last year. Long considered a possible Democratic candidate for president, Whitmer’s strategy is notably different than other potential 2028 names who have take more public, combative approaches to Trump, including California Gov. Gavin Newsom and Illinois Gov. J.B. Pritzker.

In her address, her first of the year, Whitmer said every time she has met with Trump this past year, she has told him that hurting the U.S.-Canadian relationship only helps Chinese competition.

Trump changed his tune when it comes to automobiles in the last year. He originally announced a 25% tariff on automobiles and parts only to later relax the policy as domestic manufactures sought relief from the threat of rising production costs.

On his tour in the Detroit area, Trump suggested the United States-Mexico-Canada Agreement, a major trade agreement he negotiated in his first term, was irrelevant, although he provided few other details The UMCA is up for review this year.

Whitmer defended the trade agreement in her speech.

“When we fight our neighbors, however, China wins,” she said.



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Kyle Hency started Chubbies in 2011 with three Stanford friends as a fun, weekend‑and‑beer‑vibe shorts brand.

The irreverent direct-to-consumer clothing brand—one popular item was a tear-away pair of shorts with a speedo-style bathing suit underneath—”was objectively maybe a bad idea,” Hency says, half joking. Nevertheless, the company caught fire—revenue went from $1 million to $8 million. And when Chubbies was acquired by Solo Stove in 2021, it marked a rare retail exit just as the direct-to-consumer boom began to collapse.

After spending a few years on the sidelines, Hency is back: He cofounded Good Day in 2024 with former Chubbies CFO Dave Wardell, and the startup just raised its seed round to solve one of retail’s biggest problems: managing inventory. 

It’s an area in which Hency has hard-earned, first-hand experience. Despite its ultimate success (Hency says Chubbies now does $100 million or more in sales under its new owner), Chubbies almost ran out of cash three times, and at one point managed with negative $2 million cash for 18 months. Managing inventory became critical, and Hency says he struggled with the software tools available at the time.

And in today’s market, clothing brands are under even more pressure to run a tight ship and obsess about everything below the revenue line, Hency says.

“Every single brand now has to manage revenue all the way down to profits, because those profits are the only way they can fund their business,” he says. “The lenders have gone out of business. The VCs aren’t backing brands as much as they were before. If you look up how much VC investments into consumer deals have gone down since before that period, some numbers show over 90% reduction.”

Good Day has raised $7 million in seed funding from current investors like Ridge Ventures, FirstMark Capital, and Flex Capital, the company exclusively told Fortune. New investors include Long Journey Ventures, Adverb Ventures, and Seguin Ventures. This brings the Good Day’s total capital raised to $13.5 million and current customers include Hill House Home, The Normal Brand, Margaux NY, and Kenny Flowers. 

Amish Jani, cofounder and partner at FirstMark, described Good Day as “AI-native, ERP-lite”—an enterprise resource planning system that stands apart from traditional options. He sees an opportunity for startups to capitalize on the AI boom as retailers redesign their systems of record for this new era.

“If agentic solutions are driving real utility and replacing labor costs directly, I expect e-commerce brands to be amongst the first adopters of these tools,” Jani said via email. “GoodDay is a good example of this in the ERP space, but you can also see this emerging very quickly in every major vertical SaaS category both in consumer and beyond.”

While Hency’s latest startup may seem more staid than the loud Chubbies shorts he once flogged, the entrepreneur has not completely left the attitude behind. An important part of Good Day’s brand marketing is taunting established ERP competitors like Netsuite.

“Do you think NetSuite, created 20 years ago by a bunch of suits, is helping anybody during Black Friday, Cyber Monday?,” said Hency.

Hency’s rhetoric isn’t an accident, it’s strategy. In the ERP jungle, he’s aware he’s new—but he thinks he can get customers to switch from established competitor NetSuite. There’s some evidence this could perhaps happen. Take Jimmy Sansone, co-owner of The Normal Brand and Good Day customer, who said via email: “From an operational perspective, we did not have accurate visibility into our inventory balances, and our ops teams had to rely on offline spreadsheets and manual tools to move, fulfill, buy and receive inventory.”

Hency’s directness is part of his philosophy about business.

“I think it’s so important when you’re building a brand to be different,” he said. “It’s way more important than it is to be cool.”



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Venezuelan opposition leader María Corina Machado visited the White House on Thursday to discuss her country’s future with President Donald Trump, even though he has dismissed her credibility to take over after an audacious U.S. military raid captured then-President Nicolás Maduro.

Visiting Trump presented something of a physical risk for Machado, whose whereabouts have been largely unknown since she left her country last year after being briefly detained in Caracas. Nevertheless, after a closed-door discussion with Trump, she greeted dozens of cheering supporters waiting for her near the gates —stopping to hug many.

“We can count on President Trump,” she told them, prompting some to briefly chant “Thank you, Trump,” but she didn’t elaborate.

The jubilant scene stood in contrast to Trump having repeatedly raised doubts about Machado and his stated commitment to backing democratic rule in Venezuela. He has signaled his willingness to work with acting President Delcy Rodríguez, who was Maduro’s No. 2.

Along with others in the deposed leader’s inner circle, Rodríguez remains in charge of day-to-day government operations and was delivering her first state of the union speech during Machado’s Washington trip.

In endorsing Rodríguez so far, Trump sidelined Machado, who has long been a face of resistance in Venezuela. That’s despite Machado seeking to cultivate relationships with the president and key administration voices like Secretary of State Marco Rubio, in a gamble to ally herself with the U.S. government and some of its top conservatives.

White House press secretary Karoline Leavitt called Machado “a remarkable and brave voice” for the people of Venezuela, but also said that the meeting didn’t mean Trump’s opinion of her changed, calling it “a realistic assessment.”

Trump has said it would be difficult for Machado to lead because she “doesn’t have the support within or the respect within the country.” Her party is widely believed to have won 2024 elections rejected by Maduro.

Leavitt went on to say that Trump supported new Venezuelan elections “when the time is right” but did not say when he thought that might be.

Trump administration plays down meeting expectations

Leavitt said Machado sought the face-to-face meeting without setting expectations for what would occur. Machado previously offered to share with Trump the Nobel Peace Prize she won last year, an honor he has coveted.

“I don’t think he needs to hear anything from Ms. Machado,” the press secretary said, other than to have a ”frank and positive discussion about what’s taking place in Venezuela.”

All told, Machado spent about two and a half hours at the White House but left without answering questions on whether she’d offered to give her Nobel prize to Trump, saying only “gracias.” It wasn’t clear she’d heard the question as she hugged and her waiting supporters.

Machado was next appearing on Capitol Hill, for a meeting in the Senate before planning to speak to reporters.

Her Washington stop began after U.S. forces in the Caribbean Sea seized another sanctioned oil tanker that the Trump administration says had ties to Venezuela.

It is part of a broader U.S. effort to take control of the South American country’s oil after U.S. forces seized Maduro and his wife at a heavily guarded compound in the Venezuelan capital of Caracas and brought them to New York to stand trial on drug trafficking charges.

Leavitt said Venezuela’s interim authorities have been fully cooperating with the Trump administration and that Rodríguez’s government said it planned to release more prisoners detained under Maduro. Among those released were five Americans this week.

Rodríguez has adopted a less strident position toward Trump then she did immediately after Maduro’s ouster, suggesting that she can make the Republican administration’s “America First” policies toward the Western Hemisphere, work for Venezuela — at least for now.

Trump said Wednesday that he had a “great conversation” with Rodríguez, their first since Maduro was ousted.

“We had a call, a long call. We discussed a lot of things,” Trump said during an Oval Office bill signing. “And I think we’re getting along very well with Venezuela.”

Machado doesn’t get the nod from Trump

Even before indicating the willingness to work with Venezuela’s interim government, Trump was quick to snub Machado. Just hours after Maduro’s capture, Trump said of Machado that “it would be very tough for her to be the leader.”

Machado has steered a careful course to avoid offending Trump, notably after winning the peace prize. She has since thanked Trump, though her offer to share the honor with him was rejected by the Nobel Institute.

Machado remained in hiding even after winning the Nobel Peace Prize. She missed the ceremony but briefly reappeared in Oslo, Norway, in December after her daughter received the award on her behalf.

The industrial engineer and daughter of a steel magnate, Machado began challenging the ruling party in 2004, when the nongovernmental organization she co-founded, Súmate, promoted a referendum to recall then-President Hugo Chávez. The initiative failed, and Machado and other Súmate executives were charged with conspiracy.

A year later, she drew the anger of Chávez and his allies again for traveling to Washington to meet President George W. Bush. A photo showing her shaking hands with Bush in the Oval Office lives in the collective memory. Chávez considered Bush an adversary.

Almost two decades later, she marshaled millions of Venezuelans to reject Chávez’s successor, Maduro, for another term in the 2024 election. But ruling party-loyal electoral authorities declared him the winner despite ample credible evidence to the contrary. Ensuing anti-government protests ended in a brutal crackdown by state security forces.

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Garcia Cano reported from Caracas, Venezuela, and Janetsky from Mexico City. AP Diplomatic Writer Matthew Lee in Washington contributed to this report.



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