California loses $1 TRILLION as billionaires pack their bags, flee state over fears of looming wealth taxes: report

The proposal, which has even drawn criticism even from Democratic Governor Gavin Newsom, would impose a one-time 5 percent wealth tax on individuals whose net worth exceeds $1 billion, based on holdings as of Jan. 1, 2026.

A “wealth” tax is not limited to liquid assets in cash, but would additionally tax other assets that make up a billionaire’s net worth. To cover the tax, individuals may have to liquidate some of those assets, such as businesses, real estate, or shares in a company, in order to fork over that money to the state.

“Collectively, the amount of billionaire wealth that has left California in the last month is now in excess of $700B,” wrote venture capitalist and former Facebook executive Chamath Palihapitiya in a post on X Friday.

https://twitter.com/chamath/status/2009734507788939312?s=20

“That means the $2T of California wealth they expected to tax is now down to $1.3T and falling quickly. I would not be surprised if 2026 ended with less than $1T of billionaire wealth in California and decades and hundreds of lawsuits," Palihapitiya said, describing a staggering financial drain — one large enough to purchase the entire NFL multiple times or fund NASA’s current annual budget for four decades. A complete and total unforced error. Where was the Governor? Where are our leaders??” he added.

The tax measure could appear on the November 2026 and potentially be applied retroactively, but it has reportedly prompted many of the state’s roughly 215 billionaires to buy property in lower-tax states such as Florida and Tennessee. Some have also been shifting parts of their business operations elsewhere.

California, once a magnet for technology moguls, has already seen a tangible fallout. More than 45 limited liability companies linked to Google co-founder Larry Page have recently either gone inactive or moved out of state.

Additionally, last month an organization tied to Google co-founder Sergey Brin shut down or relocated 15 California-based LLCs managing his investments and ventures to Reno, Nevada. In another high-profile move, In-N-Out Burger heiress Lynsi Snyder relocated to Tennessee and opened an additional corporate headquarters there.

Palihapitiya himself said he is giving “serious consideration” to moving to Texas, echoing warnings from financial analysts that the outflow of wealth may accelerate. “If they don’t kill this ballot initiative and entice those folks to come back, the California budget will be massively upside down," he wrote. “Only place to get the money is to cut waste, fraud, and abuse or increase taxes on the middle class. The latter is much simpler than the former.”

Supporters of the proposal, however, argue the tax would serve a vital purpose to raise revenues for the state.

Despite his progressive politics, Newsom remains opposed to the initiative, according to his office. “The Governor has consistently opposed state-level wealth taxes — recognizing that if implemented at a state-only level they drive a race to the bottom — including this proposal,” spokesperson Izzy Gardon told the New York Post on Monday.