Billionaires Brace for California Exodus as 5% Wealth Tax Nears Ballot

By Solange Reyner | Monday, December 29, 2025 09:44 PM EST

Some billionaires are reportedly weighing plans to scale back their ties with California by year’s end amid discussions of a proposed one-time 5% wealth tax on the November 2026 state ballot. The initiative, dubbed the 2026 Billionaire Tax Act, would levy a single 5% tax on all “forms of personal property and wealth, whether tangible or intangible” held by billionaires in the state to fund state healthcare programs such as Medi-Cal.

The measure lacks official backing from California Governor Gavin Newsom; it was filed last month with the state attorney general’s office by the Service Employees International Union. The union argued that the tax would be fair because “billionaires have used state resources to create their enormous wealth and were the largest beneficiaries of federal legislation contributing to the current California budget crisis.”

Tech investor Peter Thiel and Google co-founder Larry Page are reportedly assessing options to reduce or sever their connections with California by year’s end. Three individuals spoke recently about Thiel exploring openings for his investment firm in another state, while Page filed documents in mid-December to incorporate in Florida—a move he has said could lead to leaving the state by December 2025.

David Lesperance, a tax adviser who works with California billionaires in venture capital and private equity, noted that clients are preparing contingency plans ahead of the proposed vote. “Elon Musk, Tim Cook — any of these guys, they don’t need to be in Palo Alto in order to do what they do,” he stated.

The tax proposal requires approximately 870,000 valid signatures by June 25, 2026, to reach the state ballot. Newsom recently addressed similar policies, saying: “We have one individual that represents one labor union in the state of California that has not collected one signature that is considering putting on the ballot, after he collects signatures, a wealth tax that the vast majority of labor opposes, and almost everyone I know opposes.”

When questioned about politicians like democratic socialist New York Mayor-elect Zohran Mamdani who support comparable measures, Newsom added: “So, it’s not something to be panicked about.”

Garry Tan, CEO of San Francisco-based tech startup accelerator Y Combinator, opposed the initiative despite personal exemption from its impact. “While this tax wouldn’t impact me personally, I oppose it because California should be focused on keeping entrepreneurs and investors here — creating jobs, growing the economy, and funding our future,” he said. “Driving capital out of the state will hurt innovation and ultimately make it harder, not easier, to support healthcare and essential services.”