California’s Billionaire Tax Proposal Splits Tech Leaders: Some Embrace It, Others Flee in 2024
- What’s Inside California’s Billionaire Tax Proposal?
- Tech Titans Take Sides: The Stay vs. Go Divide
- The Political Firestorm: Newsom vs. Silicon Valley’s Allies
- Texas and Florida: The Billionaire Safe Havens
- Could This Reshape Silicon Valley’s Future?
- FAQs: California’s Billionaire Tax Explained
California's controversial "billionaire tax" proposal has ignited a fiery debate among tech elites, with some like Nvidia's Jensen Huang accepting it while others, including Google co-founder Larry Page and Palantir's Peter Thiel, are packing their bags for tax-friendly states like Texas and Florida. The plan—a one-time 5% levy on fortunes over $1 billion—aims to fund schools, food programs, and healthcare. But with Governor Gavin Newsom opposing it and billionaires threatening exodus, the battle lines are drawn. Here's the full breakdown of who's staying, who's leaving, and why this tax could reshape Silicon Valley.
What’s Inside California’s Billionaire Tax Proposal?
The proposed "California Wealth Tax" would impose a one-time 5% charge on residents with net worths exceeding $1 billion, retroactive to January 1, 2024. Payments could be spread over five years, with funds directed toward education and social services. For context, Nvidia CEO Jensen Huang ($159B net worth) would owe ~$7B, while Larry Page ($260B) faces a $13B bill. The SEIU-UHW union, backing the measure, argues it corrects a system where "working-class Californians pay higher effective tax rates than billionaires." But critics call it economic suicide—Vinod Khosla warns, "California will lose its top taxpayers and suffer worse outcomes."
Tech Titans Take Sides: The Stay vs. Go Divide
Huang stands almost alone in his willingness to pay, telling Bloomberg, "We chose to live in Silicon Valley—whatever taxes they apply, so be it." His reasoning? Talent concentration: "This is where the engineers are."
A who’s who of tech royalty is fleeing. Peter Thiel (est. $1.3B tax bill) and David Sacks (Trump’s crypto/AI advisor) are Miami-bound, while Larry Page’s Florida LLC filings suggest a Sunshine State move. Elon Musk—who ditched California for Texas in 2020—cheered Sacks’ departure: "No one will fight harder for Texas’ freedom than those who’ve lost it elsewhere."
The Political Firestorm: Newsom vs. Silicon Valley’s Allies
Governor Newsom opposes the tax, fearing a billionaire brain drain: "You can’t isolate yourself from the other 49 states—we’re in a competition." But Rep. Ro Khanna (D-Silicon Valley) is pushing back, tweeting sarcastically about departing billionaires: "I’ll miss them dearly" (a nod to FDR). The proposal needs 874K signatures by November to reach ballots—and even if passed, legal challenges loom. Meanwhile, SEIU’s Suzanne Jimenez points to Massachusetts and Washington as proof wealth taxes work without driving out the rich.
Texas and Florida: The Billionaire Safe Havens
No state income tax makes Texas a magnet—Oracle’s Larry Ellison and Dell’s Michael Dell already relocated there. Florida’s appeal? Sacks declared it WOULD replace NYC as the finance hub and Austin would overtake SF in tech. Thiel Capital’s new Miami office (opened December 31) signals his pivot. As VC Chamath Palihapitiya quipped, "Without billionaires, deficits will balloon."
Could This Reshape Silicon Valley’s Future?
History suggests yes. Musk’s 2020 exit saved him millions, and his SpaceX HQ MOVE followed California’s transgender student protections—a "last straw" moment. Now, with Andreessen Horowitz’s Martin Casado calling Khanna a "detestable fool" over the tax, some tech figures are plotting primary challenges. Yet Huang remains unfazed: "I’m building AI’s future—that’s my focus." Whether others share his view may determine if California’s golden goose flies south for good.
FAQs: California’s Billionaire Tax Explained
How much would billionaires pay under this tax?
5% of net worth over $1B, paid over 5 years. Example: Larry Page owes ~$13B.
Which tech leaders support the tax?
Nvidia’s Jensen Huang is the notable supporter. Most others oppose it or are leaving.
Where are billionaires relocating?
Primarily Texas (no state income tax) and Florida (business-friendly policies).
Has this happened before?
Yes—Elon Musk moved to Texas in 2020, citing taxes and policy disagreements.
