California’s Billionaire Tax Proposal Splits Tech Leaders: Some Embrace It, Others Plan Exodus

• Why are billionaires leaving California?
• How would the tax work?
• Could this hurt California’s economy?

California’s proposed "billionaire tax" has ignited a fierce debate among the state’s wealthiest tech moguls. While some, like Nvidia’s Jensen Huang, support the 5% levy on fortunes over $1 billion, others—including Larry Page, Peter Thiel, and David Sacks—are fleeing to tax-friendly states like Texas and Florida. The measure, backed by labor unions, aims to fund schools, healthcare, and food programs, but critics warn it could drive away innovation and jobs. This article unpacks the divide, the potential economic fallout, and why this tax fight is far from over. --- ### The Billionaire Tax: What’s at Stake? California’s proposed wealth tax WOULD impose a one-time 5% charge on billionaires’ net worth, retroactive to January 1 of this year. The funds would target education, healthcare, and food assistance programs statewide. For context: - Jensen Huang (Nvidia, $159B net worth) would owe ~$7B. - Larry Page (Google, ~$260B) could face a $13B bill. - Peter Thiel (Palantir, ~$26B) would pay ~$1.3B. Supporters argue it’s a fair way to address inequality. "Working-class Californians pay higher effective tax rates than billionaires," says Suzanne Jiménez of SEIU-UHW. Opponents call it a recipe for economic flight. --- ### Tech’s Civil War: Who’s Staying, Who’s Leaving? Team "Stay and Pay" : - Jensen Huang : "We choose to live in Silicon Valley," he told Bloomberg, shrugging off the tax. "Innovation thrives here." - Ro Khanna (Congressman): "This tax fuels American innovation by redistributing wealth to critical sectors." Team "Tax Exodus" : - Peter Thiel and David Sacks : Already relocated to Miami, citing "economic socialism" in California. - Larry Page : Rumored to be moving to Florida after filing corporate paperwork there. - Elon Musk : Left for Texas in 2020, saving millions. *Fun fact*: Texas, with no state income tax, has become a billionaire magnet. Oracle’s Larry Ellison and Dell’s Michael Dell also migrated there. --- ### The Political Backlash Governor Gavin Newsom opposes the tax, fearing it will push businesses out: "We’re competing with 49 other states." Meanwhile, tech investors like Chamath Palihapitiya and Vinod Khosla warn of catastrophic talent drain. Garry Tan (Y Combinator) even vowed to primary Congressman Khanna over his support for the levy. Key Quote : > "When billionaires threaten to leave, I echo FDR: ‘We’ll miss them.’" —Ro Khanna, trolling Thiel on X. --- ### Historical Context: California’s Billionaire Drain This isn’t the first time taxes have sparked an exodus: - 2020 : Musk moved Tesla’s HQ to Texas after clashing with pandemic policies. - 2023 : Palantir’s Joe Lonsdale ditched California for Austin’s lower taxes. *Irony alert*: Many tech giants still rely on California’s talent pool—even if they’re HQ’d elsewhere. --- ### What’s Next? The proposal needs 874,641 signatures to reach November’s ballot. If passed, it could set a precedent for other states—or backfire spectacularly. As Huang put it: "I’m building the future of AI. A tax won’t stop that." Disclaimer : This article does not constitute investment advice. --- ### FAQ

Why are billionaires leaving California?

Is the billionaire tax the main reason?

While taxes are a factor, some cite political climate (e.g., Musk’s feud over school policies) or cheaper operating costs elsewhere.

How would the tax work?

Is it a one-time payment?

Yes. Billionaires would have five years to pay the 5% levy on net worth exceeding $1B.

Could this hurt California’s economy?

What do experts say?

Economists are split. Some warn of lost jobs/tax revenue; others argue the funds would boost public services.