Mark Zuckerberg Considered Leaving California Over $11 Billion Wealth Tax Despite His $1 Meta Salary

Mark Zuckerberg considered moving out of California over a proposed billionaire wealth tax that could leave him facing an estimated $11 billion (£8.21 billion) bill. The Meta chief executive has since reached an arrangement that could help him cover the potential liability without immediately sacrificing his voting control of the technology giant, while committing to remain in California for at least eight years.

The proposed tax would impose a one-time 5% levy on the net worth of qualifying billionaires who met California's residency requirements on 1 January 2026. The measure highlights how a tax on wealth could affect fortunes built largely through company shares rather than conventional salaries.

California's Proposed Billionaire Wealth Tax Explained

Proposition 40 would apply to people whose net worth exceeds $1 billion (£746 million) and who met the state's residency requirements on 1 January 2026. The tax would be due in 2027, with an option to spread payments over five years at an additional cost.

Under the proposal, 90% of the revenue would go towards healthcare services, while the remainder would fund education, food assistance and administration. The measure has not yet become law, and its implementation depends on the outcome of the November ballot.

Why Zuckerberg's $1 Meta Salary Does Not Tell the Whole Story

Zuckerberg has received an annual salary of $1 (£0.75) since 2013, according to Meta's regulatory filings. However, this figure represents only a small part of his financial position. Much of his estimated wealth comes from his ownership stake in Meta, whose shares account for a substantial portion of his fortune.

Unlike income tax, which applies to earnings over a specified period, a wealth tax measures the value of covered assets, subject to relevant liabilities and exemptions. Under Proposition 40, a billionaire's potential tax bill would therefore depend on qualifying net worth rather than their annual salary.

How Zuckerberg Could Cover the Potential $11 Billion Bill

Meta disclosed that Zuckerberg had considered relocating his primary residence outside California because of the potential tax exposure. The company's board subsequently agreed to establish a new class of non-voting shares, giving him greater flexibility to sell stock to cover a possible tax bill without immediately reducing his voting control.

The estimated liability of more than $11 billion is based on a fortune exceeding $220 billion (£164.32 billion) and the proposed 5% rate. It is not an official tax assessment, and the final amount would depend on the measure's provisions and the value of assets covered by it.

Zuckerberg Commits to Staying in California

Despite previously considering a move, Zuckerberg has committed to remaining in California for at least eight years, unless material unforeseen circumstances make living elsewhere advisable, according to regulatory filings cited by The Associated Press.

The arrangement also gives Meta additional flexibility to raise capital for artificial intelligence investment, employee compensation and acquisitions. The company has argued that keeping Zuckerberg near its California headquarters is important to its leadership and operations.

California Governor Gavin Newsom and other critics have opposed the proposed wealth tax, warning that it could encourage wealthy residents to leave and reduce future tax revenue. Supporters argue that the measure could generate substantial funding for healthcare and other public services.