Billionaires are fleeing California because of the proposed 5% wealth tax.

A political earthquake. The wealthiest Californians fled the state and took their money, resources and companies with them.

SEIU United Healthcare Workers West, a statewide service workers union in California, has introduced a voting system called The Billionaire Tax Actapply a one-time 5% tax on net worth over $1 billion for any California resident. The tax is a net amount, not income, and it can catch wealthy people who have a large portion of their wealth in stocks or real estate.

The proposal has yet to be voted on, and supporters of the measure will need nearly a million signatures by the end of June to get on the November 2026 ballot.

But wealthy Californians are already looking for a door because the language in this draft measure repeatedly imposes the tax until January 1, 2026, and they know they can’t count on other Californians to vote down a ridiculous proposal.

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Suzanne Jimenez, the SEIU-UHW chief of staff who introduced the measure, calls it “a very small tax.”

Larry Page and Sergey Brin, the founders of Google, are the last to get bail in California. Garry Tan, president and CEO of Y Combinator and a self-described “San Francisco Democrat” explained to X that the wealth tax will not end up being “5%” of a billionaire’s net worth.

“Larry and Sergey cannot live in California as the wealth tax as written will take 50% of their Alphabet shares. They each own ~3% of Alphabet stock, which is worth about $120 billion each in today’s market capitalization of ~$4 trillion. But because their shares have 10x voting power, the SEIU-UHW of California will treat them as Alphabet’s 3% 10% = 30%) That means the taxable wealth of each founder would be $1.2 trillion.

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This language is not dangerous. Confiscation is the last resort of the socialists who wrote these proposals. Wealth should not be allowed in a socialist utopia and should be redistributed.

Chamath Palihapitiya, a tech billionaire and co-host of the “All-In” podcast, isn’t giving up yet but is weighing his options. Palihapitiya puts the value of the billionaire’s fortune that left California just last month at “over $700B.” He explains that the amount of wealth the proposal was hoping to tax has already dropped significantly.

“That means $2T of California treasure expected taxes are now down to $1.3T and falling fast. I wouldn’t be surprised if 2026 ends with less than a $1T billionaire in California and decades and hundreds of lawsuits. A complete and utter unforced error. Where was the Governor? Where are our leaders??”

That’s a good question, and the billions directly supporting Democrat Gov. Gavin Newsom and the rest of the Democratic political apparatus in California must demand an answer.

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Palihapitiya hopes the measure is voted down and California will work to “attract those people to come back” or, he warns, “California’s budget will be down a lot.” But what would they come back with? Billionaires are people and they move their entire lives, often removing their children and moving them to new schools, it is not so easy to reverse. And anyway, a measure like this can be introduced again at any time and, in fact, Assembly member Alex LeeD-San José, has pushed for a similar wealth tax for years despite a limited absorption rate of 1.5%.

But wealthy Californians are already looking for a door because the language in this draft measure repeatedly imposes the tax until January 1, 2026, and they know they can’t count on other Californians to vote down a ridiculous proposal.

When billionaires don’t come back, because they’ve set up their lives somewhere else and realize there’s a whole world outside of California, politicians will have to act increasing the deficit elsewhere. Non-billionaires are paying attention. Jesse Tinsley, CEO and founder of several companies including Mainstreet.com, announced on Sunday, Jan. 11, “I’ve added it to the list…I’m headed to Florida.” Tinsley, who openly supported President Donald Trump in the last presidential election, is not a millionaire but sees the writing on the wall. If all the millionaires bail out to avoid potential taxes, the class of rich below them will be targeted next.

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Those who support the bad politicians and regressive policies that have led to this moment must sit and face the consequences of what they have done. Reid Hoffman, the founder of LinkedIn and a billionaire who is known for supporting Democrats, will become the subject of an Internet joke, “I never thought leopards would eat MY face,” cried a woman who voted for the Leopards Eating People’s Faces Party.” Hoffman has considered leaving the United States after Trump is elected in 2024 therefore he cannot search for a red state to help protect his assets from the people he helped elect.

Bad ideas have consequences and California has played a game of chicken with the left and it looks like the left is winning. As the migration of billions continues, those leaving must internalize what went wrong in their home country and aim not to repeat it in their new place. California has become synonymous with failure. Leave that failure at home.

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