Billionaires are fleeing California because of the proposed 5% wealth tax on their wealth

It’s a political earthquake. The wealthiest Californians are fleeing the state, taking their capital, resources and businesses with them.

The SEIU United Healthcare Workers West, a union of service workers in California, introduced a ballot measure called the Billionaire Tax Actto implement a one-time 5% tax on net worth over $1 billion for every California resident. The tax is on total wealth, not income, and would bother wealthy people who have most of their wealth in stocks or real estate.

The idea has yet to come to a vote, and proponents of the measure will need nearly a million signatures by the end of June to get it on the November 2026 ballot.

But wealthy Californians are already running for the door because the wording in the measure’s draft makes the tax retroactive to January 1, 2026, and they know they can’t trust their fellow Californians to reject the absurd proposal.

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Suzanne Jimenez, chief of staff of SEIU-UHW, which introduced the measure, calls it “a very small tax.”

Larry Page and Sergey Brin, co-founders of Google, are the latest to bail in California. Garry Tan, president and CEO of Y Combinator and self-described “San Francisco Democrat,” explained on X that the wealth tax would ultimately not be “5%” of a billionaire’s net worth.

“Larry and Sergey cannot stay in California because the wealth tax as written would take 50% of their Alphabet stock. They each own about 3% of Alphabet stock, each worth about $120 billion at the current market cap of about $4 trillion. But because their shares have ten times the voting power, the SEIU-UHW California billionaire tax would treat them as owning 30% of Alphabet (3% × 10 = 30%). The founder’s taxable wealth would be $1.2 trillion. A 5% wealth tax on $1.2 trillion = $60 billion tax bill, each. That’s 50% of their actual Alphabet ownership – wiped out by a ‘5%’ tax.”

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This language is no coincidence. Asset seizure is the ultimate plan of the socialists writing these proposals. Wealth should not be allowed in the socialist utopia and must be redistributed.

Chamath Palihapitiya, a tech billionaire and one of the hosts of the “All-In” podcast, has not left yet but is considering his options. Palihapitiya estimates the number of billionaires who left California in the past month is “over $700 billion.” He explains that the amount of wealth the proposal hoped to tax has already been significantly reduced.

“That means the $2T of Wealth of California which they expect taxes are now down to $1.3 billion and falling rapidly. I wouldn’t be surprised if 2026 ended with less than $1 trillion in billionaire wealth in California and decades and hundreds of lawsuits. A complete and total unforced error. Where was the governor? Where are our leaders??”

That’s a good question, and billionaires who specifically supported the Democratic Administration. Gavin Newsom and the rest of California’s Democratic political machine should demand an answer.

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Palihapitiya hopes the measure is voted down and that California will try to “entice those people to come back” or, he warns, “California’s budget will be massively turned upside down.” But why would they return? Billionaires are human beings and moving their entire lives, often uprooting their children and moving to new schools, is not so easy to undo. And anyway, a measure like this can be reintroduced at any time, and in fact Assemblymember Alex LeeD-San José has been pushing a similar wealth tax for years, albeit at a modest 1.5% confiscation rate.

But wealthy Californians are already running for the door because the wording in the measure’s draft makes the tax retroactive to January 1, 2026, and they know they can’t trust their fellow Californians to reject the absurd proposal.

If the billionaires don’t return because they’ve moved their lives elsewhere and realized there’s a whole world outside California, politicians will have to do it increase the shortage elsewhere. Non-billionaires are paying attention. Jesse Tinsley, CEO and founder of several companies including Mainstreet.com, announced on Sunday, January 11, “Add me to the list…heading to Florida.” Tinsley, who openly supported President Donald Trump in the last presidential election, is not a billionaire, but he sees the writing on the wall. If all the billionaires bail to avoid the potential tax, the next target will be the wealthy class among them.

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Those who supported the terrible politicians and backward policies that led to this moment should stay and suffer the consequences of what they did. Reid Hoffman, co-founder of LinkedIn and billionaire known for his support of Democrats, is about to become the living embodiment of the Internet joke: “I never thought leopards would eat MY face,” sobs a woman who voted for the Leopards Eating People’s Faces Party. Hoffman considered leaving the United States after Trump was elected in 2024 so he can’t exactly go after a red state to help protect his assets from the people he helped elect.

Bad ideas have consequences and California has been playing chicken with the far left and it appears the far left is winning. As the exodus of billionaires continues, those leaving must internalize what went wrong in their home states and strive not to repeat it in their new country. California has become synonymous with failure. Leave that failure at home.

CLICK HERE TO BY KAROL MARKOWICZ