Concerns Over California’s 2026 Millionaire Tax Bill
Key players in the tech and cryptocurrency sectors are raising concerns about a proposed millionaire tax in California set for 2026. This ballot initiative seeks to impose a one-time 5% tax on net worth exceeding $1 billion, including unrealized gains from assets, aimed at funding state services. Critics argue this could lead to an exodus of wealthy individuals, disrupting investments and innovation in the state, and forcing them to sell stocks to pay the taxes due.
Backed by the International Federation of Service Employees and the West Health Care Union Federation, the measure would specifically target Californians whose assets surpass the billion-dollar mark. The revenue is intended for health care and public services. However, because the tax includes unrealized gains—essentially the increased value of assets that haven’t been sold—critics worry that this could pressure affluent individuals to liquidate stocks or portions of their businesses just to meet tax obligations, even if they haven’t actually cashed in on those gains.
Leaders in the cryptocurrency and tech industries have voiced their disapproval. For instance, Kraken co-founder Jesse Powell took to social media, expressing that this tax might be the “last straw,” hinting that billionaires could redirect their spending, philanthropy, jobs, and capital away from California if the proposal moves ahead. Similarly, Bitwise CEO Hunter Horsley reiterated his apprehension that taxing unrealized profits could disrupt the financial frameworks necessary for private equity and startups.
To get on the November 2026 ballot, the initiative requires around 875,000 signatures. Proponents argue that wealthy individuals typically don’t realize benefits from selling assets, and that taxing untapped wealth could help address increasing budget deficits, especially in health care. They contend that the growth in wealth for billionaires significantly outstrips wage increases, making the taxation of accumulated wealth a matter of equity.
However, not all the pushback is coming from the private sector. Some analysts warn that implementing such a tax could harm California’s competitive edge, hastening the departure of capital to regions with friendlier tax regulations. This, they suggest, could ultimately diminish long-term tax revenues, as affluent residents and businesses make their exit.
