CA voters asked for this kind of class warfare cast into the ever more intrusive laws that rule their everyday lives in ever increasing detail. The only problem is that unfortunately, even if you leave CA, wherever CA leads, most states eventually follow, because of both the "CA voter diaspora" phenomenon and CA shifting the Overton Window in directions that other state bureaucracies can only wait and dream of.
And I've not even commented on the practical "implementation details" you've raised related to the amount of personal information being disclosed to a debatably trustworthy/secure intermediary, and the definitional ambiguity between a "household" and the tax-filing entities that comprise it. I agree with all the points/objections you've raised and could probably think of quite a few more, but it's all moot: this policy is already the law of the land.