Some billionaires are contemplating leaving California by the end of the year as lawmakers discuss placing a one-time 5% wealth tax on the November 2026 ballot, The New York Times reported.
Known as the 2026 Billionaire Tax Act, the initiative would levy a one-time 5% tax on all "forms of personal property and wealth, whether tangible or intangible" of billionaires in the state in 2026 to fund state-funded healthcare programs, such as Medi-Cal.
The proposal doesn't have California Gov. Gavin Newsom's backing; it was filed last month with the state attorney general's office by the Service Employees International Union.
The union argued that the proposed tax is fair because "billionaires have used state resources to create their enormous wealth and were the largest beneficiaries of the federal legislation that contributed to the current California budget crisis."
Tech investor Peter Thiel and Google co-founder Larry Page are weighing plans to scale back or sever their ties to California by year's end as a result.
Three people who spoke with the Times said Thiel has explored opening an office for his investment firm in another state and spending more time there.
Page filed documents in mid-December to incorporate in Florida, according to state records, and he has reportedly discussed leaving the state by the end of the year, according to two people who spoke with the news outlet.
David Lesperance, a tax adviser who works with California billionaires in venture capital and private equity, told the New York Post earlier this week that some of his clients are devising contingency plans to protect their assets ahead of a likely vote on the tax.
"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 said.
The tax proposal needs about 870,000 valid signatures by June 25, 2026, to reach the state ballot.
Newsom opposes the tax.
"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," Newsom said at a DealBook summit earlier this month.
He responded to a question about politicians such as democratic socialist and New York Mayor-elect Zohran Mamdani supporting similar policies.
"So, it's not something to be panicked about."
Garry Tan, CEO of San Francisco-based tech startup accelerator Y Combinator, told the Post that "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.
"Driving capital out of the state will hurt innovation and ultimately make it harder, not easier, to support healthcare and essential services."
Solange Reyner ✉
Solange Reyner is a writer and editor for Newsmax. She has more than 15 years in the journalism industry reporting and covering news, sports and politics.
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