California Wealth Tax Proposal Heads to 2026 Ballot, Explaining Silicon Valley Billionaires' Exodus

The California wealth tax proposal was introduced in November 2025 by a healthcare workers' union and supported by lawmakers including representative Ro Khanna and senator Bernie Sanders.

The proposal, which would impose a one-time 5% tax on California billionaires as of the beginning of 2026, has officially received a sufficient number of signatures for the proposal to be put on the statewide ballot this fall. Billionaires would be taxed on stocks and business interests, even if individuals choose to relocate to other states later this year.

Note that real estate holdings would be exempt from the tax, as residents already pay property taxes, according to the state's nonpartisan Legislative Analyst's Office. Additionally, the proposal allows billionaires to spread their tax payments over five years.

However, state governor Gavin Newsom and former presidential candidate Andrew Yang continue to oppose the proposal, believing that the tax would result in an exodus of billionaires and Silicon Valley companies from the state, resulting in job losses and weakening of California's economy.

The labor union Service Employees International Union-United Healthcare Workers West plans to direct revenue from taxing the billionaires towards the state's healthcare systems, which is facing a significant shortfall following federal cuts, as well as funding for public schools and food assistance programmes. Supporters of the measure believe it could generate approximately $100 billion by taxing the state's 200 billionaires.

Bezos, Zuckerberg, and Google Cofounder Leave California Amid Tax Fears

Many billionaires like Anduril cofounder Palmer Luckey, Sun Microsystems cofounder Vinod Khosla, and even Pershing Square's Bill Ackman have opposed the wealth tax vehemently.

Khosla had said that a wealth tax could drive billionaires out of the state, while Ackman believes the tax could 'effectively represent an expropriation of private property and have many unintended and negative consequences.'

Even Palantir Technologies' Peter Thiel donated $3 million to the California Business Roundtable's political action committee, which is actively opposing the wealth tax proposal.

Khosla's forecast is turning out to be true as Meta Platforms founder Mark Zuckerberg and his wife Priscilla Chan are reportedly buying a sprawling waterfront mansion on Miami's Indian Creek, located just a few doors down from Amazon founder Jeff Bezos' new massive compound.

The creek is essentially a gated artificial island with a single access point also known as the 'billionaire bunker' and guarded by armed police.

The neighbourhood serves as a haven for some of the world's most powerful leaders and celebrities. According to media reports, the property on a 1.84-acre land parcel is being sold by a limited liability company linked to Jersey Mike's Subs founder Peter Cancro for between $150 million and $200 million.

Even Google cofounder Larry Page purchased Miami properties worth $171 million ahead of the potential tax. He acquired a 4.5-acre property in Miami's Coconut Grove neighbourhood in December for $101.5 million. The property was previously owned by the late restaurateur Jonathan Lewis.

Danny Hertzberg of the Jills Zeder Group, an agent who was involved in the transaction, said wealthy Californians are rushing to acquire properties in Florida. The Tropical Frontier Revocable Trust, with which Page is associated, also purchased another property less than a mile away for $71.9 million in January.