For years, California politicians have tried to impose their progressive agenda on the rest of the country. The electric-vehicle mandate, which was adopted by 12 other states at one point, is a great example of policy arrogance thrust upon a mostly unwilling nation.
But Karma has finally come calling, and it looks like it is going to be quite ugly. It came in the form of a “Billionaire Tax”.
The organizers thought they were being clever by backdating the tax to January 1st of this year, despite the fact that the vote won’t be held until November.
The Billionaire Tax Act, which could be added to the state’s general election ballot in November, would impose a one-time tax of 5% on the total wealth of California tax residents whose net worth is $1 billion or more. While new taxes typically take effect after they’re approved, the proposed billionaire tax would apply to those who are California residents as of Jan. 1, 2026. The retroactive date left little time for California’s estimated 200 to 250 billionaires to change their tax residency after they first learned of the potential tax in December.“The reason they did this is obvious,” said Christopher Manes of Manes Law. “If they had made the date in November, after passage, you’d have 200 people who could get out in time and save millions of dollars.”
As my colleague Mary Chastain noted, Gov. Gavin Newsom was against the plan.
However, the entrepreneurs who created companies that then generated their wealth decided to opt out of taxes if it passes this fall. Instantly, $1 trillion worth of state wealth vanished.
Venture capitalist Chamath Palihapitiya says California’s proposed billionaire tax is accelerating an exodus of ultra-wealthy residents, a shift he argues will worsen and not solve the state’s budget deficit.Palihapitiya, who has been tracking capital flight from the Golden State, said California has so far lost an estimated $1 trillion.”We had $2T of billionaire wealth just a few weeks ago. Now, 50% of that wealth has left – taking their income tax revenue, sales tax revenue, real estate tax revenue and all their staffs (and their salaries and income taxes) with them,” Palihapitiya wrote on X on Sunday.Even as the measure remains under consideration for the November statewide ballot, some of Silicon Valley’s most prominent figures warn it could trigger an exodus of founders and capital.
For example, Peter Thiel accelerated his relocation plans to Miami.
California tech billionaire Peter Thiel announced last week that he had “established a significant presence in Miami over the last several years, maintaining a personal residence in the city since 2020” and an office for his Founders Fund venture capital firm since 2021. Attorneys told CNBC that at least two other unnamed California billionaires have moved or made plans to move since the end of last year.
A number of others also moved elsewhere.
The recently departed reportedly include In-n-Out Burger owner and heiress Lynsi Snyder, PayPal co-founder and conservative donor Peter Thiel, Venture Capitalist David Sacks, co-founder of Craft Ventures, and Google co-founder Larry Page, who recently purchased $173 million worth of waterfront property in Miami’s Coconut Grove. Thank goodness he landed on his feet in these tough times.
According to the New York Post, 20 other billionaires are reassessing their need to stay in the “Golden State”.
Laughably, the Los Angeles Times published a piece complaining about wealth flight.
As the resident “bird flu” expert, I will simply note that California’s proposed Billionaire Tax has turned into a live‑action parable about killing the Golden Goose. I believe, like the Highly Pathogenic Avian Influenza, the condition is likely fatal, and during the next phase, “millionaires” and the middle class will be targeted.
After all, the fraud won’t fund itself.
I despair for my home state. The rest of you may laugh…for now.
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