California’s Wealthy Consider Leaving Over Potential Tax
Reports indicate that Google co-founder Larry Page is planning to leave California in light of a proposed billionaire tax aimed at ultra-wealthy residents eager to protect their assets.
Page, alongside venture capitalist Peter Thiel, is among several billionaires seeking to distance themselves from the state. This is largely fueled by a potential ballot measure that could impose a 5% tax on their total wealth.
Documents reveal that companies connected to Page have initiated steps to incorporate in Florida. Meanwhile, Thiel, who has an estimated net worth of $27 billion and a residence in the Hollywood Hills, is contemplating moving his operations out of California entirely. Chamath Palihapitiya, a former Facebook executive, has also mentioned he is seriously considering relocating to Texas.
Aiming to raise approximately $100 million to improve the state’s healthcare system, supporters of the billionaire tax are hoping to gather roughly 870,000 voter signatures by spring 2024. This measure is expected to take effect by November 2024, possibly affecting around 200 Californians with fortunes exceeding $1 billion.
However, the initial reports suggested that the proposed tax could impact billionaires residing in California starting in 2026, prompting those subject to it to plan their exits by the end of 2025. Tax advisor David Lesperance remarked that the tax might not have the desired effect.
California’s tax system heavily relies on the affluent, with the top 1% accounting for nearly 40% of income tax revenue in 2022. A legislative analyst in the state has acknowledged that some billionaires may leave without contributing taxes, leading to significant potential revenue losses.
Lesperance pointed out that individuals with wealth typically find it easier to relocate to more tax-friendly states like Nevada, Florida, or Texas. He remarked, “That golden goose has wings!” suggesting that these billionaires could easily change their residence to avoid the tax. They might sell or lease properties in California, minimize their time spent there, relocate business operations, or alter their voting registrations and driver’s licenses to reflect their new homes.
A committee opposing the billionaire tax—named Stop the Squeeze—has already raised $100,000, supported by venture capitalist Ron Conway.
Governor Gavin Newsom has publicly denounced the idea of taxing billionaires, yet he may feel pressure from progressive factions pushing for more revenue from the state’s wealthiest residents. Union leader Suzanne Jimenez has described the proposed one-time 5% wealth tax as “very minor,” noting it would still mean lower taxes than those experienced under President Reagan.
