Venture capitalist Chamath Palihapitiya said billionaires should publicly oppose California's proposed Billionaire Tax Act, warning that the measure could unleash years of lawsuits, destabilize the state budget and ultimately force a federal bailout.
Palihapitiya Pushes For Public Vote On Billionaire Tax Act
On Saturday, Palihapitiya made the remarks in a post on X while responding to tech investor and political strategist LuluCheng Meservey, who argued that billionaires should not be the primary voices opposing the tax.
"I disagree. Billionaires should stop hiding. They should be extra vocal," Palihapitiya wrote, calling for the measure to be placed directly on the ballot.
He said the choice was between maintaining the current system or risking "chaos" by approving the tax.
Billionaire Tax Could Spark Lawsuits, Budget Crisis
Palihapitiya outlined two possible outcomes: shelving the tax or approving it and triggering what he described as "hundreds of well funded individual lawsuits at the state and federal level."
He said some lawsuits would likely succeed by arguing the tax represents an unconstitutional retroactive seizure of assets.
During what he described as a decade-long legal battle, he said California's budget could develop "an enormous hole," leaving a federal bailout with "severe austerity" as the only option.
Meservey countered that billionaire-led opposition would be politically counterproductive.
"Billionaires cannot – cannot – be the primary spokespeople against the Billionaire Tax Act," she wrote, arguing that such messaging would alienate voters and require a different strategy.
I disagree.
Billionaires should stop hiding. They should be extra vocal. Let's vote on the BTA and let the chips fall where it may.
Door 1: Status Quo. Take the BTA off the ballot and focus on cutting waste, fraud and abuse and keep the existing system going.
California's proposed Billionaire Tax Act intensified political and business tensions.
Earlier, Governor Gavin Newsom, who built his fortune with backing from Gordon Getty, opposed the measure and called it "bad economics," warning it could destabilize the state budget.
The act would have taxed assets above $1 billion at 5%, raising funds for public services.
Silicon Valley leaders reacted differently: Google co-founder Larry Page moved his family office and assets out of California before the 2026 deadline to avoid the tax.
Rep. Ro Khanna continued to support the tax, arguing it would not hurt innovation and would fund healthcare amid federal cuts. He countered threats from billionaires like Peter Thiel, who said they would leave if the tax passed.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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