Venture capitalist Chamath Palihapitiya thinks California's billionaires need to come out of hiding. In a weekend post on X, he urged the state's wealthiest residents to publicly oppose the proposed Billionaire Tax Act, arguing that staying quiet is the wrong strategy.

The Case for Going Public

Palihapitiya was responding to tech investor and political strategist Lulu Cheng Meservey, who had argued that billionaires should not lead the opposition to the tax. Bad optics, essentially.

"I disagree. Billionaires should stop hiding. They should be extra vocal," Palihapitiya wrote. He's calling for the measure to be put directly on the ballot, framing it as a choice between the current system or what he called "chaos."

The Lawsuit Scenario

Here's where Palihapitiya gets into the mechanics. He outlined two paths: either shelve the tax or approve it and face "hundreds of well funded individual lawsuits at the state and federal level."

His prediction? Some of those lawsuits would succeed by arguing the tax amounts to an unconstitutional retroactive seizure of assets. During what he envisions as a decade-long legal fight, California's budget would develop "an enormous hole," ultimately requiring a federal bailout accompanied by "severe austerity."

Meservey wasn't buying it. "Billionaires cannot — cannot — be the primary spokespeople against the Billionaire Tax Act," she countered, warning that billionaire-led opposition would alienate voters and backfire politically.

A State Divided

The proposed tax has already deepened fractures in California's political and business circles. Governor Gavin Newsom, who built his fortune with backing from Gordon Getty, opposes the measure. He's called it "bad economics" and warned it could destabilize the state budget. The act would impose a 5% tax on assets above $1 billion to fund public services.

Silicon Valley's response has been mixed. Google co-founder Larry Page reportedly moved his family office and assets out of California before the 2026 deadline to sidestep the tax entirely.

Meanwhile, Rep. Ro Khanna continues to support the measure, arguing it won't hurt innovation and would fund healthcare amid federal cuts. He's pushing back against threats from billionaires like Peter Thiel, who've said they'd leave if the tax passes.