On January 26, the LA Times quoted Kevin Ghassomian on what to expect from the California Billionaire Tax.
According to the article, the California Billionaire Tax Act would impose a one-time 5% tax on the state’s more than 200 billionaires to help offset federal healthcare funding cuts affecting middle- and low-income residents. Both supporters and critics of the proposed tax agree that similar policies have historically had mixed results.
Ghassomian commented that the administrative costs will be more than anticipated. “On the front end, the state will face a wave of legal challenges to the tax’s constitutionality and its retroactive application to all billionaires living in the state as of the end of 2025," he said. "Moving ahead, there will be litigation from wealthy individuals whose departure from California is questioned or who dispute the state’s valuation of their net worth or individual assets — including private holdings, which the state doesn’t have extensive experience assessing.”
He added that valuating such assets will be “a nightmare, just practically speaking, and it’s going to require a lot of administrators at the state level,” especially, he added, considering that many California billionaires’ wealth is in the form of illiquid holdings in startups and other ventures with fluctuating market valuations. “You could be a billionaire today, and then the market plummets, and now all of a sudden, you’re a pauper,” he said. “It could really lead to some unfair results.”
Click here to access the article.