California Billionaires Strategize to Avoid Wealth Tax

Top earners explore divorce, art relocation, and other tactics to sidestep proposed tax

Published on Feb. 17, 2026

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As California prepares to implement a new wealth tax, the state's billionaires are actively exploring strategies to avoid the levy, including moving residences, transferring assets, and exploiting potential loopholes in the legislation. The article highlights how several of the wealthiest individuals in California have already left the state ahead of the tax's January 1 deadline, significantly reducing the expected revenue.

Why it matters

The proposed California wealth tax was intended to generate significant revenue for the state, but the exodus of top earners and their fortunes has already undercut those projections. This raises questions about the tax's long-term viability and effectiveness, as well as the broader implications for California's ability to fund social programs and public services.

The details

At a conference in Newport Beach, tax advisors provided guidance to wealth managers on tactics to help their ultra-high-net-worth clients avoid the new California wealth tax. Suggestions included getting divorced, relocating valuable art collections out of state, and purchasing homes in tax-friendly locations like Aspen. The architects of the tax proposal acknowledge that some avoidance and evasion is inevitable, but they believe the leakage will be relatively low at around 10% of potential revenue. However, the article notes that the departure of the top five wealthiest individuals in California, who collectively hold over $1 trillion in assets, has already significantly eroded the expected $100 billion in annual tax revenue.

  • The new California wealth tax is set to take effect on January 1, 2026.
  • Several of California's wealthiest individuals, including Larry Ellison, Larry Page, and Sergey Brin, have already relocated their primary residences out of the state ahead of the tax's implementation.

The players

Andrew Katzenstein

A tax lawyer who provided guidance on strategies to avoid the California wealth tax at a conference in Newport Beach.

David Gamage

A University of Missouri law professor who helped write the union's tax proposal, acknowledging that some avoidance and evasion is inevitable with taxes on the wealthy.

Larry Ellison

The founder of Oracle and the wealthiest person in California, with a net worth of $362.6 billion.

Mark Zuckerberg

The co-founder of Meta (Facebook) and the second-wealthiest person in California, with a net worth of $267.4 billion.

Larry Page

The co-founder of Google and the third-wealthiest person in California, with a net worth of $208.8 billion.

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What they’re saying

“What's the first way to avoid the tax? Get divorced.”

— Andrew Katzenstein, Tax lawyer (Society of Trust and Estate Practitioners of Orange County)

“Every tax has leakages, and especially every tax on the wealthy. There's lots of existing taxes where the leakage is much higher.”

— David Gamage, University of Missouri law professor (New York Times)

What’s next

The California legislature will continue to refine the wealth tax proposal and address potential loopholes, while the state's billionaires will likely pursue legal challenges and other strategies to minimize their tax burden.

The takeaway

The exodus of California's wealthiest individuals and their fortunes has already significantly undermined the projected revenue from the state's proposed wealth tax, raising doubts about the long-term viability and effectiveness of the measure. This highlights the challenges of taxing the ultra-wealthy and the need for policymakers to carefully consider the potential unintended consequences of such proposals.