There’s quite a stir happening in California. The state’s wealthiest residents are packing up and leaving, taking a considerable amount of money and businesses with them.
A proposed millionaire tax law from SEIU United Healthcare Workers West, which represents service employees statewide, aims to impose a one-time 5% tax on the total net worth of Californians exceeding $1 billion. This tax targets overall wealth rather than just income, hitting hard on those who primarily hold their assets in stocks and real estate.
The proposal hasn’t been officially voted on yet, but supporters are gathering nearly 1 million signatures ahead of a late June deadline for it to appear on the November 2026 ballot. However, many wealthy Californians are already taking steps to distance themselves from the state since the draft language states that the tax would be retroactive to January 1, 2026. They seem worried that fellow residents might not reject this measure.
Suzanne Jimenez, SEIU-UHW’s chief of staff, insists it’s merely a “very minor tax.” Yet, notable figures like Google co-founders Larry Page and Sergey Brin are among those who are leaving. Garry Tan, the president of Y Combinator, commented on X that the tax wouldn’t genuinely equate to “5%” of a billionaire’s wealth.
He explained, “Larry and Sergey can’t stay in California because this tax would mean losing half of their Alphabet stock.” With each owning about 3% of Alphabet, the tax scheme would potentially classify them as holding 30% due to the disproportionate voting power their shares represent. This would lead to a staggering tax obligation.
This isn’t just coincidence; the asset seizure possibility seems to align with a broader socialist agenda where wealth redistribution becomes the aim. Tech billionaire Chamath Palihapitiya hasn’t made the move yet, but he’s weighing his options. He mentioned that the number of billionaires leaving California recently accounts for over $700 billion in wealth.
Palihapitiya speculated that California could end up with billionaires worth less than $1 trillion by 2026, which sounds drastic. It’s valid to ask, where’s the governor? Where’s the leadership? This question resonates, especially since many of these billionaires were supporters of Democrat candidates.
Palihapitiya expressed a desire for the bill to fail and urged California to “incentivize these people to come back,” warning that inaction could destabilize the state’s budget. But one has to wonder if coming back is even feasible. Uprooting families and breaking ties isn’t straightforward. Similar wealth tax proposals, even with lower rates, have been on the table for years.
When the wealthy start settling elsewhere, it creates a ripple effect. Non-billionaires, like Jesse Tinsley, founder of Mainstreet.com, are also leaving, recognizing the implications of the political climate. He announced plans to move to Florida, clearly seeing the trends.
This situation highlights a significant consequence for those who supported policies leading to such an environment. Reid Hoffman, co-founder of LinkedIn, has even contemplated leaving the U.S. in reaction to past elections. The reality is that bad decisions lead to repercussions, and California seems to be experiencing just that. The state has become a symbol of failing governance.
As the exodus continues, it’s essential for those departing to reflect on what led to this upheaval and to consider avoiding similar mistakes in their next chapters.
