California’s threatened wealth tax is already causing residents to flee.
On December 26, 2025, the California Secretary of State approved a proposed initiative titled “Imposes One-Time Tax on Certain Individuals and Trusts” to enter circulation. The full ballot language can be found here. The measure is a constitutional amendment and statute and is backed by the SEIU healthcare division. Proponents must collect 874,641 signatures by June 24, 2026 for the measure to qualify for the November 2026 ballot.
The proposal would impose a supposed five percent tax on covered assets held by individuals and trusts valued over $1 billion. But the actual tax hit is much bigger.
California has already experienced years of outmigration as residents move to lower-tax states.
Entrepreneur David Friedberg estimates that $2 trillion of assets has already left the state:
“It has been underreported how much wealth has left CA because of the asset seizure tax being proposed. a private poll was conducted amongst affected individuals a few days ago and 80-90% surveyed said they have already left CA in 2025 or will leave in 2026 if the ballot measure looks likely to pass. $2-2.5T of assets gone, representing about $20B of annual revenue for the state government. and likely hundreds of thousands of jobs now at risk.” — [Link]
California’s tax system already relies heavily on high earners for income tax revenue:
“Driving billionaires out of state might feel good in the short run, but working people will pick up the tab, as the top 1% already account for 40 to 50 percent of California’s income tax revenue.” — Matt Mahan, Mayor of San Jose [Link]
A key GOP member of California congressional delegation warned the proposal would accelerate capital flight:
“A newly proposed ‘wealth tax’ is already causing an exodus from California. It turns out successful individuals would rather not have the government seize their assets simply to create a bigger pot of money for fraud, waste, and corruption.” — Kevin Kiley (R-Calif.) [Link]
Business founders are openly discussing leaving the state in response to the proposal:
“I love California. Born and raised there. But stupid wealth tax proposals like this make it irresponsible for me not to plan leaving the state.” — Andy Fang, Co-founder of DoorDash [Link]
Investors warn the policy will accelerate an entrepreneur exodus from California:
“The inevitable outcome will be an exodus of the state’s most talented entrepreneurs who can and will choose to build their companies in less regressive states.” — Chamath Palihapitiya [Link]
The head of Y Combinator noted the proposal would directly harm founder-led companies:
“The wealth tax as written would confiscate 50% of Larry Page and Sergey Brin’s Alphabet shares, turning a so-called 5% tax into a $60 billion bill for each founder because of how voting control is treated under the law.” — Garry Tan, CEO of Y Combinator [Link]
Longtime investors say the state risks losing its top taxpayers:
“California will lose its most important taxpayers and net off much worse.”
— Vinod Khosla, Investor [Link]
The wealth tax has not been enacted, but its effects are already being felt.
