For so-called “progressives” who like to rail against white male privilege, California Governor and presidential aspirant Gavin Newsom makes for a good poster boy. Nothing in Newsom’s bio suggests that he’s particularly brilliant or gifted, save for the partial baseball scholarship he was awarded to attend Santa Clara University. Newsom claimed that his severe dyslexia impaired his ability to work with numbers, but he somehow overcame the disability and managed to rack up a tidy $20 million fortune owning wineries and trendy restaurants.
While Newsom claims he built his lucrative empire by dint of his own hard work, virtually all his ventures were financed by Gordon Getty, the son of oil tycoon J. Paul Getty, a family friend who reportedly regarded Newsom as a son. How ironic that the supposed environmental champion funded his businesses with money from the drilling of fossil fuels.
Newsom was born into a life of privilege: His father, a retired state appellate judge, was a longtime friend of former Governor Jerry Brown and John Burton, a state senator who formerly headed the California Democratic Party. Newsom married rich: his in-laws, Ken and Judy Siebel, in 2020 sold a painting hanging in their home for a reported $25 million as part of their estate planning.
Follow the money
The billionaire class flocks to Newsom like birds of a feather. Newsom’s campaign to battle a move by disgruntled Californians to remove him from office last year received funding from 23 billionaires, including money managers George Soros and Jim Simons, who don’t even live in California.
It’s safe to assume Newsom’s pantry is well stocked with Grey Poupon and other delicacies enjoyed by the 1 percent, as it’s publicly known he has very refined tastes and preferences. At the height of the pandemic when Newsom ordered Californians to stay home, he was photographed eating at the French Laundry, one of the most expensive restaurants in the country without any face covering. Newsom’s dinner mates included the CEO of the California Medical Association.
Why am I mentioning all this?
It’s because to understand politics one must follow the money. My interest in Newsom’s background was sparked after reading this Politico story about Newsom opposing a proposed wealth tax that would fund his aggressive environmental goals, including the requirement that all new vehicles sold in California to be zero-emission by 2035.
Here’s what one environmentalist had to say about the darling progressive of the Democratic party failing to put his donors’ money where his mouth is.
“I’m pretty disgusted,” Mary Creasman, CEO of California Environmental Voters, told Politico. “It is astounding to say the least from a governor who says he’s progressive and wants to be a climate leader.”
Prop 30 would raise income taxes on people earning more than $2 million a year to fund zero-emission vehicle purchases and infrastructure. Half the money for incentives would go to people in lower-income communities and a share of the money for infrastructure would be used to install charging stations at apartment buildings. A portion would also be used to fund wildfire prevention efforts, a provision that backers have stressed as they tout support from firefighters.”
One might expect that Newsom would be a tad embarrassed by his seeming hypocrisy, but he knows no shame, as his French Laundry FU to California residents demonstrated.
Newsom and his wife Jennifer received more than $700,000 over the years from PG&E and related parties to fund Newsom’s campaigns and Jennifer’s film projects. PG&E is a corrupt California utility whose negligence garnered the company six felony convictions because of a 2010 gas pipeline explosion that killed eight people in suburban San Francisco. Newsom appoints the commissioners who regulate PG&E.
Despite the embarrassment of riches PG&E showered on him and his wife, Newsom rebuked the company for paying bonuses to executives and cash dividends to investors rather than spending more on infrastructure upgrades that could have prevented the myriad wildfires the company’s faulty equipment was responsible for.
“As it relates to PG&E, it’s about dog-eats-dog capitalism meeting climate change,” Newsom said at a news conference. “It’s about corporate greed meeting climate change. It’s about decades of mismanagement. It’s about focusing on shareholders and dividends over you and members of the public.”
Newsom also played a major role serving as a “broker” who helped negotiate PG&E’s exit from bankruptcy. An investigation by the local ABC station in Sacramento revealed that the deal Newsom brokered “prioritized PG&E, French Laundry friend’s clients over PG&E fire victims.”
Admittedly, imposing an additional tax on California’s super wealthy would be disastrous, given that businesses are stampeding out of the Golden State and headed for Texas and elsewhere, Tesla, Hewlett Packard Enterprise, Oracle, and Charles Schwab among those who have made the pilgrimage.
But its policies championed by Newsom and other California Democrats that’s driving the corporate headquarters relocations. Things are so bad that Silicon Valley CEOs fantasize about leaving the state as soon as they hit pay dirt.
CEOs like Thomas Siebel, who a day after he doubled his net worth taking C3ai public and becoming a billionaire, Siebel told the Silicon Valley Business Journal that “every responsible chief executive officer has to consider moving their company out of California. If you’re not considering that, you’re not fulfilling your job for your shareholders and your employees.”
Ready for an IRS audit?
So, who’s going to pay for the billions in subsidies and grants Congress is doling out like candy to GM and Ford to build electric vehicles and for the tax breaks wealthy Americans receive to buy mostly luxury EV vehicles.
You will, silly.
The Wall Street Journal’s editorial page uncovered a little detail about the Inflation Reduction Act proposed by Senate Democrats that their legacy media enablers have ignored.
From the Journal:
The pact between Sen. Joe Manchin and Majority Leader Chuck Schumer includes $80 billion in new funding for the tax man. Democrats claim this “investment” will yield more than $200 billion in revenue. That estimate is highly speculative, but if it’s anywhere close to right IRS auditors will soon be coming after tens of millions of Americans.
The $80 billion is more than six times the current annual IRS budget of $12.6 billion. The money will be ladled out over nine years and comes with few strings attached. The main Democratic command is for the tax agency to bring the hammer down on taxpayers.
The bill earmarks $45.6 billion for “enforcement,” including “litigation,” “criminal investigations,” “investigative technology,” “digital asset monitoring” and a new fleet of tax-collector cars. The result will be far more audits, civil suits and criminal referrals.
The main targets will by necessity be the middle- and upper-middle class because that’s where the money is. The Joint Committee on Taxation, Congress’s official tax scorekeeper, says that from 78% to 90% of the money raised from under-reported income would likely come from those making less than $200,000 a year. Only 4% to 9% would come from those making more than $500,000.
The IRS knows the super-wealthy employ lawyers and accountants who make litigation time-consuming and risky.
It’s unclear to me how the proposed legislation will reduce inflation, particularly given the sweetheart tax breaks given to luxury EV buyers. Tesla raised its prices when previous tax breaks were passed, and rest assured GM and Ford will do the same.
It’s a Green New Deal all right – more green for the 1 percent and less green for everyone else.