In December, a new proposal was made for an additional tax against the wealthiest residents of California.
The Golden State has already seen an exodus of businesses due to its high tax rates.
Now, even more enterprises are considering leaving California rather than turning 5% of their wealth over to the state simply for the privilege of living there.
The proposal states, “Billionaires living in California on January 1, 2026 would have to pay a one-time state tax equal to 5 percent of their net worth. The tax would be due in 2027.”
It continues, “Taxpayers would have the option to spread the payments over five years, but would have to pay more to do so. Real estate, pensions, and retirement accounts would be excluded from the tax.”
According to the state website, the money would be used mostly to fund healthcare programs. With California being a sanctuary state, I would imagine conservative billionaires are going to push back against the tax.
As I noted above, many large businesses already left or were in the process of leaving California before this tax was ever mentioned.
The most famous exit was that of Elon Musk and Tesla, as well as X, but there were far more included in the list of departures.
For instance, Charles Schwab set up shop in Texas, not far from my home, actually, as did Chevron, SpaceX, and Hewlett-Packard.
Other major companies leaving were Blue Diamond Growers and Leprino Foods, which is reportedly going to move its operations to Lubbock, Texas.
Rather than give over 5% to be mismanaged by the state, Google co-founder Larry Page is now thinking about leaving before the end of the year. Venture capitalist Peter Thiel is also considering a change of scenery.
Collectively, the one-time tax would capture about $13.2 billion from these two men alone, and that is not sitting well with them at all.
Chamath Palihapitiya, a venture capitalist and former Facebook exec, is also considering moving out of the state. In fact, he confirmed the rumors with an exchange on X with Sen. Ted Cruz (R-TX).
For some reason, Democrats seem to think they can raid these people’s bank accounts at will, and they will sit there and take it. Now, if these heavy hitters leave the state, it is important to consider that collectively, the wealthiest in the state contribute about 40% of the state’s tax revenue. So the wealthy who exit will not only avoid the wealth tax, but overall state revenues will take a massive hit. And this is how you run a state into the ground toward bankruptcy.
