The National Federation of Independent Business (NFIB) California released its Main Street Minute for January 5-9, addressing issues affecting small businesses in the state as the new year begins.
Recent reports indicate that some high-income Californians are considering leaving the state. The California Department of Finance notes that these individuals pay a significant portion of the state’s personal income tax: “In 17 of 20 years through 2021, the top one percent of income earners share of total resident personal income tax liability has been greater than 40 percent.”
This discussion is taking place as an initiative, known as the 2026 Billionaires Tax Act, seeks signatures to qualify for the November 2026 ballot. According to the secretary of state, it would “Impose a one-time tax of up to 5% on taxpayers and trusts with covered assets valued over $1 billion.” The measure requires more than 874,000 signatures by June 24.
While most NFIB members may not be directly affected by this proposed wealth tax—according to a recent survey, only four percent reported annual net incomes over $2.5 million—concerns remain about potential broader impacts. Susan Shelley from the Howard Jarvis Taxpayers Association told CalMatters: “‘We tax income at a very high level, but we don’t tax wealth and assets,’ Shelley said. Nearly half of the state’s personal income tax revenue comes from just 1% of the state’s earners. Over time, she added, a wealth tax ‘could come all the way down to the middle class and they say you have too much equity in your house and we’re taking it.’”
A key concern for small businesses is how changes in revenue could affect priorities such as paying off California’s $21 billion unemployment insurance debt.
Another initiative being circulated would make permanent existing higher tax rates for high-income Californians beyond their scheduled expiration in 2031.
The NFIB CA PAC plans to review qualified initiatives and vet legislative candidates ahead of upcoming elections to assess their impact on small business owners.
The California State Legislature opened its session on January 5. Governor Gavin Newsom is scheduled to deliver his final State-of-the-State address on January 8. Internally, NFIB ballots were distributed and its Leadership Council will meet January 7 to refine lobbying strategies for small business interests this year.
NFIB California emphasizes coalition-building with other business groups when possible but sometimes advocates alone or with limited support due to differing priorities among organizations. The group credits member engagement as key to achieving results both legislatively and at ballot boxes.
On federal matters, NFIB continues advocacy efforts such as supporting legislation like the PERMIT Act in Congress. Adam Temple stated: “84% of NFIB members believe that the EPA should not have the authority to regulate creeks, ponds, streams, ditches, and temporary or local bodies of water. Over the last several decades small business owners have dealt with constant changes to the Clean Water Act (CWA) which has prevented them from being able to plan for the future. The PERMIT Act realigns the CWA to its original intent, which is to preserve water quality while setting clear rules for businesses so that they can plan appropriately.”
NFIB also filed an amicus brief in Flowers Foods v. Brock before the U.S. Supreme Court; Beth Milito commented: “Small businesses rely on arbitration agreements as an alternative to the costly, time-consuming legal process. If this new interpretation is upheld, thousands of small business owners could be taken to court while the legal system redefines this long-upheld standard one case at a time. Meanwhile, small businesses everywhere will be caught in the crosshairs.”
Milito was further quoted regarding Michael Pung v. Isabella County: “Small business property owners deserve to be fairly compensated when the government seizes their property even if that seizure is to compensate a debt to government.”
NFIB California represents more than 35,000 small business owners statewide according its official website and provides resources along with legislative updates to support entrepreneurs. It acts as an advocacy group focused on protecting against excessive regulations while advancing policies supportive of economic growth and opportunity.
