Radical Tax Proposal Threatens California Jobs

California’s proposed “2026 Billionaire Tax Act,” a radical 5% one-time tax on the net worth of those over $1 billion, is facing massive backlash even before it reaches the ballot. Driven by labor unions seeking to fund health subsidies for undocumented immigrants, the measure has already triggered a “trillion-dollar exodus” of wealth and high-profile tech leaders like Larry Page and Larry Ellison from the state. The proposal has created a deep political divide, with Governor Gavin Newsom actively working to block the initiative as professionals warn of long-term economic fallout for middle-class Californians.

Story Snapshot

$1 trillion in billionaire wealth has fled California ahead of the proposed 5% one-time tax on net worth over $1 billion.
Tech titans like Google co-founder Larry Page and Oracle’s Larry Ellison relocated businesses to Florida to escape the tax grab.
Labor unions like SEIU push the tax to sustain generous health benefits for undocumented immigrants, despite their $8.5 billion annual tax contributions.
Governor Newsom opposes the measure, working behind the scenes to block it from the November 2026 ballot.

Proposal Sparks Massive Capital Flight

Suzanne Jimenez, a health care union representative, submitted the 2026 Billionaire Tax Act as a ballot initiative in November 2025. This one-time 5% excise tax targets individuals with net worth exceeding $1 billion based on 2025 valuations, with a January 1, 2026 obligation date. Venture capitalist Chamath Palihapitiya estimates $1 trillion in billionaire wealth has already exited California. High-profile moves include Larry Page shifting Koop LLC, Flu Lab LLC, and One Aero to Florida in December 2025, alongside Larry Ellison’s relocation.

California has lost $1 trillion as billionaires flee the Golden State due to the proposed wealth tax, which would impose a one-time 5% tax on their assets. https://t.co/qCVBxTcNZG

— FOX 11 Los Angeles (@FOXLA) January 12, 2026

Unions Target Billionaires for Illegal Immigrant Benefits

The SEIU and allied unions back the tax to fund California’s expanding health coverage for undocumented immigrants, amid persistent state budget pressures from generous benefits. Undocumented immigrants contributed $8.5 billion in state and local taxes in 2022, yet unions seek more through wealth taxation rather than broader reforms. Critics highlight the irony: these policies reward illegal immigration while punishing job creators who built California’s tech dominance. The proposal conflates voting shares with equity, hitting founder-led companies hardest.

Tech Leaders and Officials Sound Alarm

Palmer Luckey warns the tax “makes founder-led companies practically illegal.” Garry Tan of Y Combinator critiques its flawed structure, while Allison Huynh calls it the Democrats’ “eat the rich” response to MAGA. Palihapitiya laments lost reliable taxpayers: “California billionaires were the sheep you could shear forever. Now California will lose this revenue source forever.” Even former Obama/Biden fundraiser Huynh predicts mass migration of wealth and innovation, eroding the middle-class tax base.

Newsom’s Opposition Signals Democratic Divide

Governor Gavin Newsom opposes state-level wealth taxes, citing research on relocation risks, and is relentlessly working against the proposal. Proponents gather signatures for the November 2026 ballot, but the annual version lags. Capital flight undermines revenue goals before enactment, threatening jobs, startups, and state competitiveness. Middle-class Californians face higher burdens as tech ecosystems shift to low-tax states like Florida, echoing national frustrations with globalist overreach and fiscal mismanagement.

Tech Titans Fleeing California? California is weighing a bold proposal to tax its billionaires

Economic Fallout Hits Working Families

Short-term, business relocations slash income tax revenue from billionaires. Long-term, venture capital and innovation migrate, risking job losses for everyday Californians. Reduced funds could cut social programs, including immigrant health subsidies unions aim to protect. This self-defeating policy exemplifies government overreach, prioritizing illegal immigration rewards over American workers and family values. President Trump’s border security contrasts sharply, securing prosperity without such absurd wealth grabs.

Watch the report: Billionaires threaten to leave California over proposed wealth tax