Billionaire Tax Sparks Exodus from California

Proposed 5% tax on wealth over $1 billion leads to flight of billionaires and assets from the state

Jan. 28, 2026 at 5:47pm

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California is considering a new 'billionaire tax' that would impose a one-time 5% levy on anyone's wealth over $1 billion. This proposal has already triggered a mass exodus of the state's wealthiest residents, with an estimated $1 trillion in assets leaving California before the end of 2025 to avoid the tax. High-profile figures like Google co-founder Larry Page have fled the state, dealing a major blow to California's tax base and economic outlook.

Why it matters

The billionaire tax threatens to further erode California's economy and population, which has already seen over 200,000 net residents move out of state each year due to high taxes and cost of living. The loss of billionaires and their assets will drastically reduce state tax revenue, hurting public services and the middle class the most. Experts warn the tax could 'sink California's innovation economy' by driving out the state's wealthiest and most productive residents.

The details

The proposed billionaire tax would be retroactive to January 1, 2026, spurring a wave of wealthy Californians to preemptively leave the state before the end of 2025. Venture capitalist Chamath Palihapitiya estimates that billionaires took $1 trillion in assets out of California in December alone to avoid the tax. High-profile figures like Google co-founder Larry Page have confirmed they have left the state. The tax would target anyone with over $1 billion in wealth, imposing a one-time 5% levy. Opponents argue it would involve arbitrarily taxing unrealized gains, displaying 'arrogance' and a 'dearth of economic literacy'.

  • The proposed billionaire tax would be retroactive to January 1, 2026.
  • Billionaires began fleeing California in December 2025 to avoid the tax.

The players

Chamath Palihapitiya

A venture capitalist and co-host of the 'All-In' podcast who estimates billionaires took $1 trillion in assets out of California in December 2025 to avoid the proposed tax.

Larry Page

The co-founder of Google who has confirmed he has left California to avoid the proposed billionaire tax.

Peter Thiel

A wealthy individual who has already given $3 million to efforts to defeat the proposed billionaire tax measure.

Gavin Newsom

The Democratic governor of California who has said the proposed billionaire tax 'makes no sense'.

Mathew Mahon

The Democratic mayor of San Jose, California who said the proposed billionaire tax would 'sink California's innovation economy'.

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What they’re saying

“We must not let individuals continue to damage private property in San Francisco.”

— Robert Jenkins, San Francisco resident (San Francisco Chronicle)

“Fifty years is such an accomplishment in San Francisco, especially with the way the city has changed over the years.”

— Gordon Edgar, grocery employee (Instagram)

What’s next

The proposed billionaire tax measure still needs to be approved by California voters before it can be implemented.

The takeaway

California's pursuit of a billionaire tax has already triggered a mass exodus of the state's wealthiest residents and their assets, dealing a major blow to the state's tax base and economic outlook. Experts warn the tax could further erode California's innovation economy and hurt the middle class the most, underscoring the risks of overly aggressive wealth redistribution policies.