Apr 30, 2026
The proposed California Billionaire Tax Act is garnering mixed opinions. On Monday, billionaire venture capitalist Chamath Palihapitiya shared his thoughts on X (1), warning middle-class Californians that this tax could actually affect them too.
"As you go to work today and settle into the week, please study the form below. You will soon need to fill this out EVERY year and tell the government what you own and then allow them to tell you how much its worth" he wrote, sharing an image of a Personal Asset Disclosure form that states respondents could be penalized at 40% of the assessed tax for underestimating the value of their assets.
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While this form is purely hypothetical — Palihapitiya’s way of insinuating that new ways of taxing the ultra-wealthy could quickly inspire similar changes to the middle class — it certainly echoes the concerns of some California residents.
"As much as Billionaires can be pushed to do more for society, we all know that they have the infrastructure to manage these kinds of disclosures...middle class Californians do not and they will be the ones that get penalized in the end," Palihapitiya wrote (2).
What's going on with the billionaire tax right now
The California Billionaire Tax Act was filed by the Service Employees International Union – United Healthcare Workers West (3) (SEIU-UHW) in response to the imminent collapse of California's healthcare system. They proposed a one time, 5% emergency tax on billionaires in the state to prevent the collapse of healthcare and help fund public K-14 education and state food assistance programs.
"The tax would be paid only by Californians worth more than $1 billion — which is about 200 people who hold a combined wealth of $2 trillion" the SEIU-UHW states on their website (4).
As of this week, the tax has made it one step closer to going to ballot in November. In a press conference on Monday (5), the SEIU-UHW said that they collected more than 1.5 million signatures on their petitions supporting the proposed tax. This is nearly double the875,000 signatures it needed to qualify for the ballot (6).
State officials will now begin the verification process, and if they conclude that the required amount of signatures are valid, the tax will be placed on the November ballot.
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Middle class fears
Not everyone is cheering on the SEIU-UHW as they celebrate their signatures. In fact, some billionaires that would be impacted by this tax are simply fleeing the state to avoid it.
David Lesperance, an advisor to ultra high net-worth clients in California, told ABC10 (7) that eight of his clients have left for Florida, Texas and Nevada, and 10 are preparing to leave.
"They're doing everything they can to fight the fire," Lesperance said.
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On that note, consultant Roger Salazar told ABC10 about his worries regarding the Billionaire tax: "When businesses leave California (8), thousands of good paying jobs disappear, paychecks shrink, communities suffer" he said. Salazar is just one person participating in opposition efforts as a member of the political action committee, Golden State Promise (9), that was created to oppose the wealth tax.
This is where middle class fears come in. Not only do billionaires fleeing the state affect the economy, but even the fact that a tax targeting the ultra-wealthy is so close to coming to ballot instills fear that further taxation methods could change, and the middle class is only a couple rungs down, waiting to feel the effects.
That being said, ABC10 (10) reported that "there are three ballot initiatives interpreted by many as countermeasures to the billionaires tax." If any of them go to ballot, there's always a chance they would beat out the billionaire tax.
"This wealth tax would have a devastating impact on our economy, state budget and the cost of living for all Californians," Rob Lapsley, president of the California Business Roundtable, told the Los Angeles Times (11).
The final decision on whether the tax will be placed on the November ballot is set to be made by June 25th.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
X (1),(2); SEIU-UHW (3),(4); YouTube (5),(7),(8),(10); CBS News (6); California Business Roundtable (9); Los Angeles Times (11)
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Em Norton is a Content Specialist at moneywise.com. They have been with the company since 2022.
