Billionaires like Google CEO Larry Page and PayPal co-founder Peter Thiel are reportedly contemplating leaving California by year’s end. This move comes in response to a proposed “wealth tax” that might be voted on this November.
The initiative aims to impose a one-time 5% tax on the net worth of individuals who were California residents as of January 1 and have over $1 billion in net worth. Estimates suggest this could generate nearly $100 billion in revenue for the state.
David Lesperance, a tax advisor focusing on relocating wealthy individuals to lower-tax areas, mentioned that he helped four billionaires exit California before the New Year.
Divesh Makan, a co-founder of ICONIQ Capital, pointed out that he knows up to five locals who have already departed. He expects another 15 to 20 billionaires may follow their lead if the tax gets voter approval, which represents nearly 10% of California’s billionaire population.
Page’s net worth stands at about $263.8 billion, while Thiel sits around $27.5 billion, placing them among roughly 200 Californians worth over $1 billion. For Page, a 5% tax would amount to about $13.19 billion.
Page has already begun relocating his assets to Florida, acquiring around $173 million in waterfront properties in Miami’s Coconut Grove, including a $101.5 million estate and a $71.9 million mansion. According to reports, he has officially disengaged from California.
Thiel, known for his conservative views and opposition to wealth taxes, has also expanded his investment firm, Thiel Capital, by opening an office in Miami. While he still owns a home in Los Angeles, he has registered to vote in Florida.
Others in the wealthiest echelon have shown interest in moving to Texas, which has no state income tax. David Sacks, co-founder of Craft Ventures, disclosed that his firm opened an office in Austin, Texas, after relocating from San Francisco.
Notably, Elon Musk moved from California to Texas in 2020, making Texas the base for companies like Tesla and SpaceX, and his net worth is estimated over $700 billion.
Several other major firms have also left California for Texas, including Oracle and Hewlett-Packard. In-N-Out President Lynsi Snyder moved her family to Tennessee last summer, citing challenges in raising a family and conducting business in California.
NVIDIA CEO Jensen Huang seems unfazed by the potential tax, claiming he hasn’t even thought about it. “We chose to live in Silicon Valley, and whatever taxes they would like to apply, so be it. I’m perfectly fine with it,” Huang mentioned in a recent interview.
