Silicon Valley’s wealthiest residents are once again threatening to leave California, this time over a proposed state wealth tax that tech founders warn could fundamentally reshape where innovation — and capital — call home.
The proposal, backed by the Service Employees International Union–United Healthcare Workers West, would impose a one-time 5% tax on the assets of California residents worth more than $1 billion.
Supporters say the revenue could help offset federal funding cuts for healthcare.
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Even as the measure remains under consideration for the November statewide ballot, some of Silicon Valley’s most prominent figures are warning it could trigger an exodus of founders and capital.
Palmer Luckey, cofounder of defense tech startup Anduril, said the tax would force “founders like me to sell huge chunks of our companies” to pay for what he described as “fraud, waste and political favors for the organizations pushing this ballot initiative.”
“I made my money from my first company, paid hundreds of millions of dollars in taxes on it, used the remainder to start a second company that employs six thousand people and now me and my cofounders have to somehow come up with billions of dollars in cash,” Luckey wrote on X.
Luckey’s comments come as billionaire tech investor Peter Thiel and Google co-founder Larry Page weigh whether to cut ties with “The Golden State” over the proposed ballot measure, according to a New York Times report.
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If the measure qualifies for the November ballot and is approved by voters, it would apply retroactively to anyone who lived in California as of Jan. 1, 2026.
In practical terms, a resident with $20 billion in assets on that date would owe a one-time tax of $1 billion, payable over five years.
Billionaire investor Bill Ackman echoed those concerns, calling California “on a path to self-destruction” if the measure moves forward.
“Hollywood is already toast and now the most productive entrepreneurs will leave, taking their tax revenues and job creation elsewhere,” the Pershing Square chief wrote on X.
Earlier this month, California Gov. Gavin Newsom said he opposed the proposed billionaire tax, while cautioning against panic over the measure.
“It’s not something to be panicked about, but it’s part of the broader concern and narrative that’s developed in this country of the haves and have-nots, not just income inequality, but wealth inequality,” Newsom told an audience at The New York Times DealBook conference.
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