California’s wealthiest are packing their bags to dodge a looming tax that could drain billions from their fortunes.
Google co-founder Larry Page, venture capitalist Peter Thiel, and others like Chamath Palihapitiya are reportedly planning to abandon rabid leftist Governor Gavin Newsom's California to avoid a proposed 5% wealth tax targeting around 200 residents with net worths over $1 billion, the New York Post reported.
For hardworking California taxpayers, especially retirees on fixed incomes, this saga spells trouble with a capital T, as the state relies on the top 1% for nearly 40% of its income tax revenue as of 2022. If these billionaires bolt, the financial burden could shift onto everyday folks through higher taxes or slashed services. Let’s not kid ourselves—when the big fish swim away, the little fish get hooked.
Larry Page is reportedly on the fast track out, with companies tied to him filing paperwork to incorporate in Florida. Meanwhile, Peter Thiel, the PayPal co-founder worth an estimated $27 billion, is mulling over moving his venture firm’s office beyond state lines while still owning a Hollywood Hills home. These aren’t idle threats; they’re calculated moves to sidestep a potential $12 billion tax bill for Page and $1.2 billion for Thiel.
Then there’s Chamath Palihapitiya, a former Facebook exec, who’s eyeing Texas as his next stop. These titans of industry aren’t just grumbling—they’re ready to change driver’s licenses, sell properties, and spend less time in California to establish residency in tax havens like Nevada or Florida. It’s a chess game, and they’re playing to win.
Advocates for the tax, needing roughly 870,000 signatures by spring 2024 to get it on the ballot, argue it’s a lifeline for the state’s struggling health care system, projecting a $100 million boost. But here’s the rub: if the targets—set to be taxed starting 2026 if they reside in California—leave before then, that revenue vanishes faster than a mirage in the Mojave. Progressive dreams meet practical reality, and guess who loses?
California’s own legislative analyst admits it’s “likely” some of these heavy hitters will exit rather than pay up, costing the state hundreds of millions annually in lost revenue. That’s not pocket change; it’s the kind of shortfall that could gut public programs or jack up taxes for the rest of us. The Golden State’s golden geese are indeed flapping their wings.
Speaking of which, tax advisor David Lesperance quipped, “Those Golden Geese have wings!” He’s not wrong—wealthy folks can relocate with relative ease, and they’re not shy about doing it. While progressives push for fairness, they might be faring themselves right out of funds.
On the flip side, Suzanne Jimenez, chief of staff for the SEIU-UHW union, countered, “They’d still be paying less than what they were paying under President Reagan.” Fair point, but it ignores the mobility of modern billionaires who aren’t tethered to nostalgia or state lines. When push comes to shove, loyalty to a balance sheet often trumps loyalty to a zip code.
Opposition to this wealth tax isn’t sitting idly by—a group called Stop the Squeeze has already raised $100,000 from venture capitalist Ron Conway to fight it. They’re sounding the alarm that squeezing the ultra-rich might backfire spectacularly. It’s a classic case of unintended consequences waiting to pounce.
Even Governor Gavin Newsom has voiced opposition to the tax, though he’s caught between a rock and a hard place with progressive allies hungry for more revenue from the state’s elite. It’s a political tightrope, and one misstep could send fiscal stability tumbling.
Let’s be clear: California’s dependence on its wealthiest residents is a double-edged sword. When nearly 40% of income tax comes from the top 1%, losing even a handful of billionaires could trigger a domino effect of budget cuts or tax hikes for the middle class. That’s not justice; it’s just bad math.
The clock is ticking for these billionaires to relocate before the proposed tax kicks in at the start of 2026. Whether it’s selling mansions, shifting business operations, or updating voting registrations, they’ve got a playbook to avoid the hit. It’s less about dodging responsibility and more about protecting what they’ve built—can we really blame them?
For the rest of California, the stakes couldn’t be higher. If this tax passes and the wealthy exodus happens, everyday families could face the real compliance costs through diminished services or heavier tax loads. It’s a gamble, and the house might not win.
So, will California keep its billionaires, or will tax-friendly states like Texas and Florida become the new playgrounds for the ultra-rich? This isn’t just a story about money—it’s about the future of a state teetering on the edge of fiscal sanity. One thing’s for sure: the outcome will hit closer to home than any Sacramento press conference.
