Billionaire Chamath Palihapitiya warns California's billionaire tax could hit the middle class with penalties for undervaluing what they own

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 the end of April, the tax has made it one step closer to going to ballot in November. In a press conference on April 27 (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 the 875,000 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.

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.