California’s Billionaire Tax Proposal Divides Tech Titans: Some Embrace It, Others Flee to Tax-Friendly States
- What’s the Billionaire Tax Proposal About?
- Tech’s Civil War: Who’s Staying and Who’s Bailing?
- The Political Battle Lines
- Lessons from the Billionaire Exodus Playbook
- Will the Tax Backfire?
- What’s Next for the Proposal?
- FAQs
California's proposed one-time 5% wealth tax on billionaires has sparked a fierce debate among tech elites. While Nvidia CEO Jensen Huang accepts it as part of living in Silicon Valley, others like Larry Page and Peter Thiel are packing their bags for Texas and Florida. The tax, aimed at funding schools, healthcare, and food programs, faces an uphill battle—requiring 874,641 signatures just to make the ballot. Meanwhile, Governor Gavin Newsom warns against isolating California economically, while proponents argue it’s a fair way to redistribute wealth. Will this drive innovation or drain the state’s top earners? Here’s the full breakdown.
What’s the Billionaire Tax Proposal About?
California’s bold plan WOULD impose a one-time 5% tax on residents with a net worth exceeding $1 billion as of January 1 this year. The estimated $21.3 billion in revenue would fund public schools, healthcare, and food assistance programs. Billionaires would have five years to pay—meaning Nvidia’s Huang owes ~$7 billion, Google’s Page ~$13 billion, and Thiel ~$1.3 billion. SEIU-UHW, the union backing the measure, argues ordinary workers pay higher effective tax rates than the ultra-rich. "It’s reasonable to ask those who benefited most to contribute more," said SEIU’s Suzanne Jimenez. But critics call it a recipe for billionaire flight.
Tech’s Civil War: Who’s Staying and Who’s Bailing?
Jensen Huang stands almost alone, shrugging, "We chose to live here—taxes come with it." Nvidia’s AI dominance keeps him rooted.Larry Page (Florida-bound), Peter Thiel (Miami office already open), and TRUMP advisor David Sacks (posted a Texas flag with "God Bless Texas") lead the charge. Even Elon Musk, who fled to Texas in 2020, cheered Sacks’ move: "No one fights for freedom like those who’ve lost it." Palantir’s Joe Lonsdale and Oracle’s Larry Ellison also ditched California for tax-friendly Austin.
The Political Battle Lines
Governor Newsom opposes the tax, fearing it’ll make California "uncompetitive." But Rep. Ro Khanna (D-Silicon Valley) fires back: "Billionaires won’t leave—this is where the talent and innovation are." He even mocked Thiel’s exit on X, quoting FDR: "I’ll miss them dearly." Meanwhile, VC firm Andreessen Horowitz’s Martin Casado called Khanna a "disgusting guy," hinting at a primary challenge. Y Combinator’s Garry Tan piled on: "Time to vote him out."
Lessons from the Billionaire Exodus Playbook
This isn’t California’s first rodeo. Musk’s 2020 move to Texas saved him millions, and he’s since relocated Tesla and SpaceX HQs. Texas’s zero income tax and "anti-woke" policies lure conservatives, while Florida’s sunshine and tax breaks attract coastal refugees. Page’s Florida LLC filings suggest he’s next. Thiel, despite owning a Hollywood Hills mansion, just opened a Miami office—adding to his 2020 Palm Beach home. "Socialism drives innovation… to other states," joked Sacks.
Will the Tax Backfire?
Critics warn of a budget doom loop: "California will lose its top taxpayers and spiral," said Vinod Khosla. Chamath Palihapitiya predicts wider deficits if billionaires bolt. But Massachusetts and Washington show wealth taxes can work—both states raised billions without chasing off the rich. SEIU hopes Huang’s stance inspires others: "This isn’t about punishment," said Jimenez. "It’s about stabilizing our collapsing systems." Huang, for his part, stays focused: "I’m building AI’s future—taxes won’t stop that."
What’s Next for the Proposal?
The measure needs 874,641 signatures by April to reach November’s ballot. Even then, Newsom could veto it. But with 186 billionaires calling California home—the most of any state—the stakes are sky-high. As Khanna put it: "Innovation thrives when wealth is shared." The question is: Will billionaires agree?
FAQs
How much would the California billionaire tax raise?
An estimated $21.3 billion, based on 2024 billionaire wealth data from Forbes.
Which tech leaders support the tax?
Nvidia’s Jensen Huang is the only major CEO openly accepting it. Most oppose or plan to relocate.
Where are billionaires moving to avoid taxes?
Texas (no income tax) and Florida (no state income tax) are top destinations. Elon Musk, Peter Thiel, and Larry Ellison have already moved operations there.
