California’s controversial billionaire tax could eventually hit more than just the people at the top of the financial food chain — eventually hurting the everyday Californian — according to a powerful Sacramento business group.
The California Business Roundtable, which represents major employers in California, claimed in a memo obtained by The California Post that the proposed tax — which will go before voters in November after gathering more than 1.6 million signatures — could be later tweaked to go after non-billionaires.
Rob Lapsley, the group’s president, cites a section of the tax plan that would allow California lawmakers to amend it later with a two-thirds vote of both the state Assembly and Senate — as long as the change is “consistent with a furthers the purposes” of the 5% wealth tax on billionaires.
“While proponents say this tax only applies to billionaires, the Wealth Tax is carefully drafted to give the Legislature far broader power amend the “2026 Billionaire Tax Act” than voters might expect,” Lapsley wrote in the memo, which was circulated to Business Roundtable members and individuals concerned about the billionaire tax.
“This means the Legislature could amend any and all portions of the initiative — including the constitutional provisions, lowering the $1 billion threshold, making the tax permanent and removing the exemptions for real property and retirement accounts,” the memo alleged.
The SEIU United Healthcare Workers West, chief sponsor of the billionaire tax, called Lapsley’s analysis a flat-out lie.
The Sacramento business group is “once again ignoring the fact that Federal healthcare cuts from the ‘Big, Beautiful Bill’ are already crushing the businesses they are supposed to represent,” Suzanne Jimenez, SEIU-UHW’s chief of state, told The Post in a statement.
“As Section 50310 of the Billionaire Tax Act says, any amendments cannot change the fundamental purpose of the act, which is to impose a one-time tax on billionaires,” she continued.
Extending the tax to middle-class taxpayers, or making it permanent, would be “neither consistent with or in furtherance of the purposes of the Act,” Jiminez said.
“This purpose fundamentally is to raise ‘funding for health care, education, and food assistance by imposing a narrowly applicable, one-time tax that is administratively feasible and efficient to enforce against all billionaires in the State,” she added.
Supporters of the billionaire tax say it could raise up to $100 billion over five years to fund health care and education initiatives damaged by Republican lawmakers’ federal cuts.
Other provisions of the billionaire tax require taxpayers to submit a declaration attesting that they are not billionaires and grant the state Franchise Tax Board audit responsibility for rooting out tax cheats, Lapsley noted in the memo.
Lapsley’s interpretation was echoed by Republican Assemblymember David Tangipa and tech investor Chamath Palihapitiya, who compared the tax to a “trojan horse” that could eventually come for less wealthy Californians.
“Intelligence test for you: if this was meant to just target Billionaires, why did they write this in?” Palihapitiya wrote on X, referring to the clause allowing lawmakers to amend the law.
The Tax Foundation, a Washington DC-based think tank, weighed in on the possibility of extending the billionaire tax last month.
Senior Fellow Jared Walczak wrote in a blog post that new taxes have a “way of sticking around,” pointing to laws like New York’s 2009 millionaire tax that were enacted as temporary measures but extended repeatedly.
Extending the billionaire tax would require a “creative” legal interpretation that may not survive court challenges, according to Walczak. But the tax could also make future, more permanent wealth tax proposals more likely, he wrote.
Sen. Bernie Sanders, Rep. Ro Khanna and other lefty Dems have come out in favor of the tax, while Gov. Gavin Newsom opposes the measure and has worked behind the scenes to stop it.
Stop the Squeeze, a committee opposing the tax led by venture capitalist Ron Conway, claimed the tax could kill 100,000 jobs and depress tax revenue by sending wealthy taxpayers fleeing to lower-tax jurisdictions.
Google co-founder Sergey Brin, who moved to a $42 million Nevada chalet overlooking Lake Tahoe to avoid the 5% levy, has reportedly taken particular offense to the billionaire tax due to his personal history in the Soviet Union.