Crypto Leaders Clash With California Over Proposed 5% Wealth Tax on Billionaires

California's bold proposal to impose a one-time 5% wealth tax on net worth exceeding $1 billion has sparked fierce opposition from crypto and tech luminaries. The measure targets unrealized gains—including unsold assets like stocks and private company holdings—with potential liabilities reaching billions for the state's wealthiest residents.

Jesse Powell, Kraken's co-founder, lambasted the plan as "a 5% theft of unrealized gains" in a blistering tweet that went viral. His sentiment echoes widespread industry concerns that such taxation could trigger an exodus of talent and capital from the Golden State.

Proponents argue the estimated $100 billion windfall could fund critical social programs. But crypto executives warn the policy misunderstands asset liquidity, particularly for founders holding large stakes in private blockchain ventures. The debate intensifies as California positions itself as both a tech hub and progressive policy laboratory.