California’s Proposed Billionaire Wealth Tax Sparks Crypto Industry Backlash

California's ambitious 5% wealth tax proposal targeting billionaires has drawn fierce opposition from crypto leaders, who warn of capital flight and forced asset liquidations. The 2026 California Billionaire Tax Act would apply to approximately 200 individuals holding $2 trillion in combined assets, including cryptocurrency holdings.

Crypto executives argue the tax could trigger mass exodus of tech entrepreneurs from Silicon Valley, potentially destabilizing the state's position as a blockchain innovation hub. The proposal comes as federal healthcare cuts loom, with supporters claiming the tax could generate funds for education and social programs.

Market observers note parallels to Norway's failed wealth tax experiment, which prompted billionaire departures. The debate highlights growing tensions between progressive taxation policies and cryptocurrency's borderless nature, with digital assets offering easier relocation options than traditional holdings.