Khanna says wealth tax must not stop at billionaires, fueling Chamath’s ‘Everyone Tax’ warning
Venture capitalist Chamath Palihapitiya’s warning that California’s proposed “Billionaire Tax” could evolve into an “Everyone Tax” has gained fresh attention after Rep. Ro Khanna (D-Calif.) publicly argued that wealth taxes should extend beyond billionaires.
In a new Substack essay titled Why I Support a Billionaire Wealth Tax, Khanna wrote that “the tax should not stop at billionaires, it must reach centimillionaires,” endorsing an annual federal wealth tax beginning at $50 million in net worth. Khanna highlighted a bill he introduced with Senator Bernie Sanders at the federal level titled Make Billionaires Pay Their Fair Share Act.
The comments represent a notable expansion from the “billionaire tax” label that has dominated the tax debate. While Khanna’s proposal concerns a separate federal measure rather than California’s ballot initiative, critics argue it reinforces concerns that wealth taxes could gradually broaden to cover more taxpayers over time.
Earlier, Palihapitiya argued on X that California’s proposed measure was “actually an Everyone Tax,” claiming the proposal contains language that would allow lawmakers to expand it beyond billionaires and convert it into a recurring annual tax without another statewide vote.
Khanna says “Wealth Taxes are the Moral Test of Our Time”
Khanna’s latest essay marks one of his clearest endorsements yet of expanding wealth taxation beyond billionaires.
“The tax should not stop at billionaires, it must reach centimillionaires,” he wrote, referring to Americans with at least $50 million in net worth.
Khanna pointed to Rep. Pramila Jayapal’s Ultra-Millionaire Tax Act, legislation he has co-sponsored with other progressive Democrats including Alexandria Ocasio-Cortez (D-NY) , Ilhan Omar (D-MN), Rashida Tlaib (D-MI). The bill proposes a 2% annual tax on household wealth above $50 million, with a higher rate for the wealthiest Americans.
Khanna also argued that assets placed into irrevocable trusts should remain subject to the wealth tax by taxing the grantor who established the trust, saying wealthy individuals should not be able to shield assets through estate planning.
Khanna wrote, “Supporters are right to call the fight in California the reverse Proposition 13 of our generation. In 1978, California voted for Prop 13 to cap property taxes, and that anti-tax revolt carried Ronald Reagan to the presidency two years later. This is that revolt in reverse: instead of capping taxes on property, we are taxing the extreme wealth at the top. This is a philosophical fight, and California is the test case for the nation.”
Critics say the threshold is already moving
Critics quickly seized on Khanna’s essay as evidence that the wealth tax debate has already shifted beyond billionaires.
Former Microsoft executive Steven Sinofsky summarized the change in a post on X, writing, “Just like that, no longer a billionaires tax.”
Pirate Wires editor Mike Solana argued that the proposal amounts to an annual tax on accumulated assets rather than income and warned that the threshold has already fallen from $1 billion to $50 million. He suggested the trend could continue over time, writing that “this ends with your 401(k).”
Solana posted on X: khanna’s ‘billionaire wealth tax,’ which is not a tax but an asset seizure in which he tallies everything you own, then demands a percentage *on top* of what you’re taxed — every single year — is already targeting anyone worth $50 million or more. this ends with your 401k.
Austen Allred, CEO of GauntletAI.com said, “It took about one week for Khanna to get bullied into suggesting his “billionaire tax” should actually be on anyone worth $50 million”
Christopher F. Rufo replied to Khanna on X, “The total amount you would raise from a 5% “billionaire tax” is an order of magnitude less than the California government loses to fraud schemes. If you can’t even manage what you have, stop asking for more.”
Whole Mars Catalog responded to Khanna’s proposal on X stating, “Ro Khanna is already saying the billionaire tax should apply to people with $50 million or more Soon it will be lowered to $1 million. Then $100,000. Then $10,000.”
Nate Fischer, CEO of NewFounding posted on X, “An ambitious foreigner, grasping for political power, seeks to destroy the conditions that allowed America’s success.”
Financial commentator Sid Prabhu posted President John Adams’ quote “The moment the idea is admitted into society, that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence. If “Thou shalt not covet,” and “Thou shalt not steal,” were not commandments of Heaven, they must be made inviolable precepts in every society, before it can be civilized or made free.“
Supporters of wealth taxes reject that characterization, arguing the proposed federal legislation explicitly targets only ultra-wealthy households and is intended to reduce wealth inequality.
Chamath points to “shifty language describing how the government plans to take your assets”
Before Khanna’s latest essay, Palihapitiya had been criticizing California’s proposed Billionaire Tax Act, arguing that the measure contains provisions that could eventually broaden its reach.
He pointed to language he says would allow lawmakers to convert the tax into a broader levy and change it from a one-time assessment to an annual tax without returning to voters for approval.
“The Billionaire Tax is actually an Everyone Tax,” Palihapitiya wrote.
He also questioned why a proposal marketed as applying only to billionaires contains dozens of pages describing valuation, reporting, enforcement, and administrative procedures.
In a post on X, Chamath wrote, “On page twenty-six of “The Billionaire Tax” proposal in California, it explains how the state legislature can convert from a Billionaire Tax to an Everyone Tax without voter approval. They can also adjust the tax to be a yearly tax, not just one time…again, without your approval.
Intelligence test for you: if this was meant to just target Billionaires, why did they write this in?”
Chamath further elaborated on the details tucked into the tax proposal.
The Billionaire Tax is a new tax proposal written by four professors who don’t believe in the American dream. Some of them aren’t even American…go figure.
Despite its name, it applies to every California resident who currently has assets or ever will. The creators named it the Billionaire Tax so you would get into a froth and wouldn’t look closely at what it actually does to you.
On page twenty-six, it explains how the government can convert to an Everyone Tax without voter approval. They can also adjust the tax to be a yearly tax, not just one time…again, without your approval.
Here’s how the tax would work: As a voter, you’re being asked to approve a tax that would require you to:
1. list all your assets and the value of each, then submit them to the California Franchise Tax Board.
2. authorize the tax board to appraise your assets and confirm the value of each.
3. pay a penalty of up to forty percent of your tax bill if the board determines your reported value was too low in their opinion.
4. allow the tax board to subpoena your financial records from every one of your financial institutions for auditing.
This Everyone Tax runs 34 pages of shifty language describing how the government plans to take your assets.
Read the fine print and decide for yourself. If this were truly a billionaire tax, it would be 3 pages. It’s 34 pages so that it can create the mechanisms to steal from all of you.”
Chamath Palihapitiya warns “the California budget is hosed”
Venture capitalist Chamath Palihapitiya had already issued a blunt warning in January that the state’s budget troubles could ultimately land on the middle class.
In a sharply worded post on X, he wrote:
“The California budget is hosed.
Now, the only place to look is the middle class and what should worry an average Californian is that this idiotic ‘Billionaire Tax’ actually allows the legislature to apply it to the middle class as they see fit.
Buyer beware…”
His remarks added fresh fuel to an already heated clash between tech leaders and Rep. Ro Khanna over the proposed wealth levy.
Billionaire tax “math doesn’t add up”
In a post on X, Chamath Palihapitiya said “California is disguising a proposed asset seizure tax as a “Billionaire Tax,” but the math doesn’t add up. They wanted $100B from 200 Californian billionaires but $500B in wealth has already fled the state, leaving a $25B hole in their plan. And it’s still only a proposal. Imagine how much more wealth will leave if this actually makes the ballot?? Why should you care? The fine print in the bill allows the California legislature to apply this asset tax to non-billionaires as well whenever they want. Your car, home and jewelry would all count. California isn’t coming just for the rich. This bill, while disguised as a tax on the wealthy, is actually the infrastructure to tax everyone in California even more – but now on everything you own. Instead, why not fund our budget by first stopping the waste??”
San Jose Mayor Highlights Waste and Fraud in California
Palihapitiya is not the only one warning about the billionaire tax impact on Californians.
San Jose Mayor Matt Mahan was forcefully warning several months ago that the policy could trigger unintended consequences for ordinary California residents.
In January, Mahan had said in a post on X that the “so-called wealth tax is going to backfire,” arguing that unless the state first closes federal tax loopholes and aggressively cuts waste and fraud, the burden will ultimately fall on middle-class taxpayers while California’s innovation economy is put at risk.
San Jose Mayor Matt Mahan argued that the wealth tax isn’t just misguided; it ignores California’s real fiscal failures.
“Just in the last few years in California alone, credible sources estimate that we’ve had $20 to $30 billion in fraudulent unemployment claims and huge amounts of waste in our health care system,” Mahan said. “So I think we ought to ask government to do better before we ask taxpayers to pay more.”
Mahan points out that California is already a high-tax state with one of the most progressive tax structures in the country. The top 1% of earners already generate about 40% of the state’s income tax revenue.
“So let’s close loopholes,” he said, “but also realize that there’s a lot of waste and fraud in government that we ought to be going after first, before we put our innovation economy at risk.”
Mahan agrees economic inequality is real and that federal cuts to the social safety net are dangerous. But he says taxing wealth at the state level is the wrong solution; especially without first addressing waste, fraud, and abuse.
“Making all Californians poorer is not the answer,” Mahan wrote. “Driving out the entrepreneurs and innovators who have enriched California is not the solution to a growing concentration of wealth.”
Mahan points to uncomfortable facts state leaders rarely emphasize: more than $20 billion lost to unemployment fraud during the pandemic, up to 30% of community college financial aid applications flagged as fraudulent, massive cost overruns on state construction projects, and billions spent on homelessness programs that failed to reduce the number of people living on the streets statewide.
Rooting out waste and inefficiency, Mahan argues, would make government more effective; and reduce the perceived need for economically risky taxes.
Gavin Newsom takes a different path with national billionaire tax
Mahan’s warning lands at a pivotal moment. California can choose to double down on symbolic wealth taxes on assets; or confront the harder work of reforming how government spends trillions of dollars already entrusted to it.
“If California wants to ‘stick it to the rich,’” Mahan warns, “the rich have a simple response: they can just leave.”
As debate over California’s proposed wealth tax intensifies, Gov. Gavin Newsom has staked out a different position; opposing the state ballot measure while simultaneously calling for a national tax on the ultra-wealthy.
Just one day after California’s Billionaire Tax Act officially qualified for the November ballot, Newsom unveiled a proposal for what he described as “a true minimum tax on billionaires and those with a net worth of $100 million.”
In a Substack essay titled It’s time for a national billionaires’ tax and a new social compact, Newsom argued that taxing wealth should occur at the federal level because wealthy individuals can easily relocate across state lines.
“Wealth is movable, and it shops for the state with the lowest taxes,” Newsom wrote. “The fight belongs at the federal level, where this broken system was created in the first place.”
Newsom’s proposal has drawn renewed attention because it appears to mark a shift in messaging. While he has campaigned against California’s wealth tax initiative, he is now championing a similar concept at the federal level; albeit with a different structure and rationale.
The timing is also politically significant. By unveiling a national tax proposal immediately after California’s measure qualified for the ballot, Newsom positioned himself as a supporter of taxing the ultra-wealthy while distancing himself from the state initiative, a move that many political observers view through the lens of his widely anticipated 2028 presidential campaign.
Palihapitiya’s “buyer beware” warning also underscores a widening divide within California. As the billionaire tax debate deepens, the battle lines are no longer just between lawmakers and billionaires; but within the middle class itself, with broader questions emerging about who ultimately bears the cost.
The fight is no longer just about billionaires or California
Within just a few weeks, the wealth tax debate has evolved dramatically. What began as California’s proposed one-time tax on billionaires has expanded into a broader national conversation, with Khanna openly arguing the tax should reach households worth $50 million, Chamath Palihapitiya warning the proposal could become an “Everyone Tax,” and Newsom calling for a nationwide tax on billionaires and households worth more than $100 million instead of California’s ballot measure.
Whether voters view those developments as evidence of a “slippery slope,” as critics contend, or as separate policy proposals targeting different segments of the ultra-wealthy, as supporters argue, is likely to become one of the defining questions of California’s November ballot fight.
Khanna has been exploring a presidential run, while Newsom is widely seen as a leading contender in the Democratic Party.
Bernie Sanders, Elizabeth Warren, Markey, Booker, Wyden and other Democrats have launched competing wealth tax plans as Democrats eye the 2026 midterms and set the stage for an early preview of the economic debate leading into the 2028 presidential race.
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John Dealbreuin came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.
He started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. John resides in the San Francisco Bay Area enjoying nature trails and weight training.
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