A proposed ballot measure that would impose a 5% tax on billionaires’ assets is roiling Silicon Valley and exposing a rift inside California’s Democratic Party.
The measure was filed by the Service Employees International-United Healthcare Workers West. The one-time tax would raise about $100 billion, blunting the impact of federal spending cuts and raising much-needed state revenue, proponents say.
The measure needs roughly 874,000 valid signatures to qualify for the November ballot. But because it would be retroactive to January 1, 2026, some wealthy residents are taking preemptive action. At least one California billionaire, Google co-founder Larry Page, has moved out of state. Many more are threatening to follow.
Opponents of the measure say it would put California at a competitive disadvantage and result in capital flight that ultimately shrinks the tax base. They note the proposal would apply to unrealized gains and worldwide assets, not just liquid assets. Affected individuals stand to lose billions of dollars.
California is home to around 250 billionaires — more than any other state. Counties with the highest number of billionaires include Los Angeles, Santa Clara, San Francisco, and San Mateo. In the event of a mass exodus, these counties could see less property tax growth, fewer jobs, and reduced revenue from local sales and use taxes.
The plan is opposed by Governor Gavin Newsom and San Jose Mayor Matt Mahan. San Francisco mayor Daniel Lurie has not yet taken a position. Democratic Congressman Ro Khanna, who represents California’s 17th Congressional District (including parts of Silicon Valley), was an early supporter of the tax. He’s now facing political backlash from some of his wealthy constituents.
While the proposed Billionaire Tax Act is getting the cold shoulder from most Silicon Valley tech moguls, there are exceptions. Nvidia CEO Jensen Huang, told Bloomberg he is “perfectly fine” with it and will not be leaving the state.