The designer behind California’s debated billionaire tax has expressed concerns that the proposal is pushing wealthy individuals to leave the state. Despite this, SEIU-United Health Care Workers West President Dave Regan dismissed these claims as “totally fabricated,” even as reports suggest an increasing number of billionaires are either departing or mulling over the idea ahead of the November elections.
Regan argued there’s “absolutely no evidence” supporting the notion that affluent Californians are leaving due to this tax initiative, which has drawn criticism from figures like Governor Gavin Newsom, business leaders, and tech executives. “Billionaires are the richest people on the planet. They can reside wherever they choose, whether in the U.S. or elsewhere,” he noted.
Labor group leaders maintained that similar fears had not come to fruition in other states. Regan referenced the millionaire tax in Massachusetts, stating, “All our data shows that millionaires make this argument repeatedly,” adding that prior predictions of mass relocation never materialized. “The governor can claim it all he wants, but the facts don’t back him up,” he asserted.
These remarks followed reports that at least six billionaires have already changed their residency status as the January 1 deadline approached, attempting to sidestep the proposed tax. Notable figures who have reportedly fled or shifted their residences include Google co-founder Larry Page, who bought a substantial property in Florida valued at $170 million. Peter Thiel and David Sachs are among others who have also taken significant steps away from California.
Sergey Brin has been associated with both Lake Tahoe and real estate in South Florida. Additionally, space entrepreneur Steve Jurvetson and AI executive Naveen Rao have been linked to moves in the Lake Tahoe area of Nevada.
Many billionaires—like Jeff Bezos and Larry Ellison—have established residences outside of California, while Meg Whitman recently sold her large ranch in Northern California amidst rising controversy over the tax plan. Tax consultant David L’Esperance mentioned he assisted a few billionaire clients in changing their residency to evade the impending tax, with further estimates indicating another 15 to 20 families could potentially follow suit if the measure is passed.
Regan was firm in his rebuttal to these forecasts. “The tax we’re proposing is a one-time levy applied to those who were California residents as of January 1 this year. Therefore, billionaires have little incentive to leave; their legal residency is already well-established.” He further expressed confusion over the claim that billionaires would exit due to this tax, arguing that the data simply doesn’t support it.
The California Millionaire Tax Act has officially qualified for the November ballot after its advocates gathered sufficient signatures. This bill proposes a one-time 5% tax on individuals with a net worth exceeding $1 billion, set to generate around $100 billion, with a significant portion earmarked for health programs like Medi-Cal and some allocated for education and food assistance.
Regan emphasized that the tax was necessary to confront looming federal health care cuts. “This emergency tax aims to restore California’s faltering health care system and prevent the loss of coverage for 3.5 million people. If successful, this bill could provide essential funding for challenges that currently have no solutions, including from the governor himself,” he said.
Contention over the bill has escalated, particularly since Newsom pledged to campaign against it, arguing that such a wealth tax would deter investments and ultimately harm the state’s finances. There have been proposals for a reduced tax rate of 2% during discussions with Newsom, but those have been turned down due to notable flaws within the proposal.
In November, voters will see not just the billionaire tax but also opposing measures backed by a coalition including Brin and former Google CEO Eric Schmidt, aimed at lowering taxes should both initiatives pass. One of these competing proposals suggests additional audits and includes elements that critics believe could complicate the billionaire tax’s implementation.
There are also efforts underway to prohibit retroactive taxation on personal financial assets and to restrict lawmakers’ capacity to exempt new tax revenues from California’s constitutional spending restrictions, particularly targeting the billionaire tax’s retroactive application starting January 1 and its associated funding mechanism.
