A proposed law that provides for the creation of a very high tax on large fortunes is leading investors and executives in the technology sector to reduce their economic and legal presence in California. According to a report published this Monday (19) by the newspaper Washington Postbillionaire businessmen began to discuss and, in some cases, have already started plans to move to other states in light of the political advancement of the call California Billionaire Tax Act.
According to the Washington Postthe proposed law provides for the collection of a single tax of 5% on assets exceeding US$1 billion of state residents. The result of a popular initiative, the text was presented to local legislators in November last year. The measure is being sponsored by the Service Employees International Union–United Healthcare Workers West (SEIU-UHW) union, which represents healthcare workers, and has the declared objective of “offsetting” federal cuts in social programs promoted by President Donald Trump’s administration.
As reported by Washington Postexecutives and investors began to accelerate relocation plans after realizing that the text of the project provides for retroactive application of the tax to California residents from January 1, 2026. Tax lawyers interviewed by the newspaper say that this section should be the target of legal disputes.
According to the report, big businesspeople are already starting to leave California. Technology billionaire Peter Thiel, co-founder of PayPal and Silicon Valley investor, has already announced the transfer of his family officeThiel Capital, to Miami, Florida. David Sacks, a technology investor and member of the United States government in the area of artificial intelligence and cryptocurrencies, stated that he is moving to Austin, Texas, where he opened a branch of his venture capital company, Craft Ventures. Both Florida and Texas have better tax laws than California.
O Washington Post also reported that Google co-founders Larry Page and Sergey Brin, who are among the most influential entrepreneurs in the global technology sector, have already moved entities under their control from California to other states.
According to the Postalthough technology entrepreneurs often threaten to leave California for tax and regulatory reasons, permanent moves have been rare until now. Experts cited in the American newspaper’s report state that the comprehensive nature of the current proposal, which focuses on total assets – and not just income -, has raised the level of concern among businesspeople and investors.
According to Cornell University sociology professor Cristobal Young, interviewed by the newspaper, billionaires tend to stay where they built their businesses and networks of influence, but measures considered excessively punitive can act as a “breaking point”.
Right now, the proposal is in the signature collection phase, a step required by California law for grassroots initiatives. Unlike a project presented by state deputies, this type of measure does not first go through the local parliament. If organizers gather around 875,000 valid signatures, the text will be included directly on the electoral ballot and it will be up to voters to decide, in a vote, whether or not the tax will be turned into law.
