California’s governor’s race is shaping up as the most consequential tax fight the state has seen in decades, with candidates staking out positions that couldn’t be further apart on who pays what and how much.
The structural problem driving all of it is real. Projected deficits could hit $35 billion in coming years, and whoever wins in November inherits that mess on day one. That’s not a budget footnote. It’s a forcing function.
Democrats Katie Porter and Tom Steyer both want corporations to pay more, though they don’t agree on the mechanics. Porter has drafted new corporate tax proposals aimed at absorbing the damage from federal health care cuts while directing money toward education. Steyer’s headed in the same direction. On the other side, Republicans Steve Hilton and Chad Bianco are pushing hard for cuts, targeting relief for working families and businesses alike. Porter has broken from the usual Democratic script on that last point, backing tax cuts for working families in a move that’s drawn some genuine interest from across the aisle.
Nobody currently polling in double digits has touched the billionaire wealth tax. A health care union is working to get a one-time tax on billionaire wealth onto the November ballot, and the silence from the front-runners has been loud. The proposal has sent, as LAIST described as “shockwaves through California politics,” yet not one leading candidate has stepped forward to own it.
Gavin Newsom, who can’t run again, spent recent months publicly insisting California has a spending problem rather than a revenue problem. His finance team reinforced that during budget hearings this spring, signaling he won’t sign off on new taxes before leaving office. His successors aren’t bound by that position.
“If you’re gonna talk about affordability, and affordability is the main kind of buzzword of the campaign, well, you gotta start with taxes,” said Tim Anaya of the Pacific Research Institute, a free-market think tank based in Sacramento.
Anaya’s point lands. Affordability is what California voters keep coming back to in 2026, and the tax code sits right at the center of it. You can’t separate the two.
To understand why overhauling that code is so difficult, go back to 1978. Voters passed Proposition 13 that year, capping property tax increases and triggering a chain reaction that the state still hasn’t recovered from. California became deeply dependent on a progressive income tax, which meant its revenues started tracking the fortunes of a narrow group of high earners and their capital gains. When tech stocks tumble, Sacramento feels it fast. A rough stretch for the Nasdaq doesn’t just hurt investors. It punches a hole in the state budget that no one had penciled in.
Over 40 years of attempts to change that dynamic have produced modest tweaks at best, according to Anaya. The fundamental structure has stayed frozen. What’s on the table now isn’t a structural fix. It’s a collection of targeted proposals, each designed to carve out a piece of the problem rather than solve the whole thing.
That’s the bind every candidate faces. The 2026 race is 15 candidates deep at various stages, and the serious ones all know the math. Winning the argument on affordability probably requires having something real to say about taxes. Having something real to say means picking a side on questions that have divided Californians since before Proposition 13.
The January 26 filing deadline shaped the field. Since then, the debate has clarified without producing consensus, and the billionaire wealth tax hanging over the ballot has complicated everyone’s positioning. None of the front-runners want to defend a vote either way on a measure that volatile.
What’s clear: the next governor won’t have the luxury of Newsom’s posture. The deficit’s too big. The voters are too worn down on cost of living. And the gap between what Porter, Steyer, Hilton, and Bianco are proposing is wide enough that whoever wins will have a real mandate, or a real problem, probably both.
April 15 passed without any major candidate releasing a comprehensive tax platform. That gap is getting harder to ignore.