(NewsNation) — A billionaire backlash is brewing among California’s wealthiest residents over a proposed 5% wealth tax, with some warning they could move their businesses and their money out of the state.
State analysts warn that if the measure becomes law, California could lose hundreds of millions of dollars in tax revenue each year, along with jobs, investment and innovation tied to its tech-driven economy.
What is the Billionaire Tax Act?
The 2026 Billionaire Tax Act, backed by a health care labor union, would impose a one-time 5% tax on residents worth more than $1 billion, including on assets held in stocks or private companies. The tax would apply to anyone considered a California resident on Jan. 1, 2026 — even if voters approve the measure later.
The Golden State is home to some of the country’s wealthiest tech leaders, including Google co-founder Larry Page, Meta CEO Mark Zuckerberg and Oracle’s Larry Ellison.
Under the proposal, each could face a one-time tax of $1 billion or more.
California billionaires look to Florida
Supporters say the proposal could raise up to $100 billion for health care, food assistance and education. However, the measure has drawn sharp criticism from some wealthy investors.
Hedge fund billionaire Bill Ackman wrote on the social platform X that California is “on a path to self-destruction.”
“Hollywood is already toast and now the most productive entrepreneurs will leave taking their tax revenues and job creation elsewhere,” he wrote.
Florida has emerged as a popular destination for some billionaires, drawn by its lack of state income tax, clearer residency rules and growing tech scene.’
According to records cited by the New York Times, three limited liability companies linked to Google’s Page were incorporated in Florida in mid-December. The filings show companies are managed by Assumption LLC, which oversees Page’s investments and family office, known as Koop.
Venture capitalist Peter Thiel has also established residency in Miami and registered to vote in Florida, state records show. The New York Times reported he has also obtained New Zealand citizenship and explored citizenship in Malta.
A Miami-based luxury real estate agent told the Times that at least five California billionaires recently reached out about relocating to Florida to “offset their risk of exposure to the billionaire tax.”
California Gov. Gavin Newsom slams wealth tax proposal
Leaders in California are divided on the proposal. Democratic Rep. Ro Khanna has argued that tech leaders leaving the state defies common sense and would be “good for innovation.”
Democratic Gov. Gavin Newsom, however, has opposed wealth tax proposals in recent years, calling them impractical and warning they push people out of California. He is reportedly fundraising against the measure and says it’s still far from becoming law.