Proposed California Wealth Tax Scares Away Billionaires

Billionaires are leaving California in droves in the face of a ballot initiative seeking to place a 5 percent tax on their wealth.

At least six dozen billionaires left the Golden State before the new year and more than a dozen others could follow suit, Bloomberg reported, citing financial advisers working for the affluent. If approved by voters this November, any billionaire living in the state as of Jan. 1, 2026 would be eligible for the one-time 5 percent tax on fortunes exceeding $1 billion.

On Dec. 31, Peter Thiel and David Sacks both publicly announced new office locations in Florida and Texas, respectively, following the relocation of four other billionaires ahead of the new year. Financial adviser David Lesperance told Bloomberg that he helped four billionaires leave the state ahead of the Jan. 1 residency cut-off date; Iconiq Capital founder Divesh Makan knows a handful of other families that have already departed and expects another 15 to 20 to flee if the tax is approved, Makan told Bloomberg.

The billionaire tax initiative still has a ways to go before making it to the November ballot. The effort must gather hundreds of thousands of signatures to qualify for the ballot, then secure approval from a majority of California voters. Democratic Gov. Gavin Newsom is among those who have spoken out against the bill.

Tech founders from major companies like Netflix, WhatsApp and Stripe are reportedly also looking at homes in Florida to escape California, the New York Post reported. Last month, Google co-founder Larry Page bought roughly $173 million of waterfront real estate in Miami, including one $100 million estate and another one nearby for $72 million, per the Wall Street Journal.

“In the last probably month or so, I’ve had multiple billionaires from California come to see several different listings that I have,” Devin Kay, a Miami-based agent with Douglas Elliman, told the Post. “So there’s definitely a huge wave of them, it appears they are either buying properties in Miami or in the market to buy properties, and will once they find something here shortly.”

“I’ve been seeing a huge influx from California ever since Covid,” Kay added. “In the last three or four years, I’ve seen more buyers from California than I ever have in my entire career. But I would say the megabillionaires or the very, very wealthy people from California — that is definitely more recent as of the last, maybe two or three months.”

Simply put, these ultra-wealthy buyers are looking to escape the possible ballot measure in California. “I think it’s pretty obvious why these guys are doing what they’re doing in Miami,” Kay said.

But billionaires aren’t the only ones leaving California, and this trend isn’t new among the average person.

Of the more than 2.5 million one-way trips using U-Haul vehicles last year, the difference between number of people leaving and the number of people arriving was higher in California than in any other state, the Los Angeles Times reported, citing data from U-Haul. The Golden state has had the biggest net outflow for six years in a row. Of California U-Haulers, 50.6 percent of the moving company’s one-way customers left, while 49.4 percent arrived.

— Chris Malone Méndez