California Democrats Should Heed the Rolling Stones
The Rolling Stones, back in the 1970s, made a significant move from England to tax exile in the south of France.
They weren’t alone in their departure. Many iconic rock stars left Britain due to excessive taxation. For instance, David Bowie opted for Switzerland, while Rod Stewart settled in California.
Keith Richards, the Stones’ guitarist, reminisced to Fortune magazine about their reasons for leaving. “We left England because we were paying 98 cents on the dollar. We left and they lost money. There were no taxes at all,” he said.
Now, progressives in California appear to be steering the state toward a pre-Margaret Thatcher-like Britain. It’s not the famous personalities who are packing up this time; instead, it’s the billionaires who are the backbone of Silicon Valley and the state’s economy.
The proposed Billionaire Tax Act of 2026 is likely to have a detrimental effect, transforming the Golden State into something much less appealing.
When California raises taxes to compensate for the fleeing billionaires and corporations, other blue states and cities find themselves caught in a repetitive cycle.
This particular tax isn’t just an incremental profit tax. Instead, the millionaire tax acts as a direct appropriation, essentially confiscating 5% of a taxpayer’s assets in one fell swoop.
It targets individuals with assets exceeding $1 billion, a surprisingly small group—fewer than 300 people live in California at this wealth level.
If a large voter base can push through this expropriation now, what’s to stop them from targeting a larger group of individuals later? What starts with billionaires might not end there.
Even Governor Gavin Newsom, who’s no stranger to losing funding from high-profile exits (just ask Elon Musk), thinks this billionaire tax might be overreaching.
Or maybe not? He did mention to the New York Times that while he is concerned about California’s competitiveness, the idea of national asset forfeitures isn’t entirely unwelcome.
“It’s one thing to consider a national perspective, but competing with 49 other states is a different challenge,” he noted.
Is it a perspective that truly reflects the people’s sentiment?
Newsom expressed that one can’t simply escape the issues by relocating to Texas.
The governor has positioned California as a sanctuary for undocumented immigrants, while simultaneously encouraging some of the most successful entrepreneurs to consider leaving.
In stark contrast, states like Texas and Florida are thriving due to their more welcoming tax practices, attracting entrepreneurs who foster job creation and innovation.
The tech talent exodus actually started long before California’s billionaire tax proposal.
However, this plan is likely to hasten the departures, and regardless of its outcome, it reinforces Silicon Valley’s deepest fears about the state’s future.
In other words, billionaires are seeking more favorable environments elsewhere.
Elon Musk left for Texas in 2020, subsequently relocating Tesla, SpaceX, and other ventures. Peter Thiel has moved to Florida, steadily shifting his business operations out of California. David Sachs is moving to Austin, and there are whispers that Google co-founders Sergey Brin and Larry Page are also diminishing their California ties.
Even the billionaire owner of the iconic burger chain In-N-Out announced a relocation to Tennessee last July.
From 2011 to 2021, California lost 1.9% of its corporate headquarters, according to a June 2025 report from the Public Policy Institute of California.
The Los Angeles Times reported a net migration of 741 companies in 2022 and 531 in 2023.
California and New York are seen as key Democratic states, but both face struggles stemming from heavy taxes and stringent regulations.
According to the Financial Times, these two states have historically recorded the highest numbers of domestic companies exiting.
Such trends mirror those of other blue states and cities, slowly undermining the prosperity that funds a variety of social services and governmental benefits.
Similarly, in Illinois and other areas, short-sighted unions are compounding California’s challenges.
The Billionaires’ Tax is being pushed by the Service Employees International Union, which aims to mitigate the impact of federal service cuts by targeting the wealthiest Californians.
If that creates anxiety for Newsom, it could be advantageous for unions, leveraging that fear to gain more concessions from him and his party.
If California were an independent nation, it would rank as the fifth largest economy worldwide. The individuals whose skills and resources drive this prosperity are not idly waiting to see what happens to them.
They’re more inclined to follow the Stones’ lead and seek their success where it’s not penalized.
