At Least Half of the $2 Trillion in Billionaire Wealth Have Left California

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The total wealth that has left California is now $1 trillion.

California had $2 trillion of billionaire wealth just a few weeks ago. Now, 50% of that wealth has left – taking their income tax revenue, sales tax revenue, real estate tax revenue and all their staffs (and their salaries and income taxes) with them.

In other words, by starting this ill conceived attempt at an asset tax, the California budget deficit will explode. And we still don’t know if the tax will even make the ballot. If the measures passes, it could be held up with lawsuit challenges.

California billionaires were reliable tax payers – 13.3% every year.

Unless this ballot initiative is pulled, we will not stop the billionaire exodus. With no rich people left in California, the middle class will have to foot the bill.

The “2026 Billionaire Tax Act” is a voter initiative backed by the Service Employees International Union–United Healthcare Workers West (SEIU-UHW) that aims to appear on California’s November 2026 ballot, provided it gathers around 875,000 signatures. It would impose a one-time 5% excise tax on the net worth (including all forms of personal property and wealth, tangible or intangible) of applicable individuals and trusts exceeding $1 billion.

Key details

It targets California residents (full- or part-year) as of January 1, 2026, with retroactive effect if passed. The January 1, 2025, backdating language was dropped to try and get something defensible and passable. There will be legal challenges.

Key Potential Lawsuits and Challenges
– Retroactivity and Due Process Violations (U.S. and California Constitutions)
The Act’s tax obligation is tied to residency on January 1, 2026—nearly 11 months before potential voter approval in November 2026. Challengers argue this creates a “harsh and oppressive” retroactive tax, violating the Due Process Clause (5th and 14th Amendments). Precedents like Carlton allow modest retroactivity for rational purposes

– Dormant Commerce Clause Violations
The tax applies to worldwide assets, potentially taxing wealth generated outside California without fair apportionment. Under the Complete Auto test, taxes must have substantial nexus, be fairly apportioned, non-discriminatory, and related to state services. Challengers (via attorney Alex Spiro’s letter to Gov. Newsom) claim it fails apportionment and burdens interstate commerce, especially for nonresidents or those with global holdings.

– Takings Clause and Equal Protection Violations (5th and 14th Amendments)

Critics like Spiro label it an “uncompensated confiscation of property” (Takings Clause) and discriminatory, concentrating burden on a tiny group (~200-250 billionaires) to solve general revenue issues, violating equal protection (citing Armour v. City of Indianapolis, 2012).

Counter proposals — Budget Stability Act of 2026
Raises the voter approval threshold to a two-thirds supermajority for passage of any statewide initiative that creates a one-time tax (directly targeting measures like the billionaire tax).

Exemptions are directly held real estate, pensions, and retirement accounts are excluded. However, real estate owned through businesses would be taxable.

Payment Structure. Due in 2027, but taxpayers can opt to spread payments over five years (with a small deferral fee/interest charge). Legal challenges may block passage and if passed could limit what goes into effect and will take years to resolve lawsuits.

Revenue Projection

Expected to raise approximately $100 billion over five years (or about $20 billion annually) from roughly 200 affected billionaires, primarily to offset federal cuts to healthcare (Medi-Cal), education, and food assistance programs. For example, someone with $20 billion in taxable net worth would owe $1 billion, while higher-net-worth individuals like Larry Page (estimated $258 billion) could face over $12 billion.

Broader ImplicationsB

Critics, including Palihapitiya, describe it as an “asset seizure” and warn that the fine print could enable future expansions to non-billionaires (taxing cars, homes, or jewelry). Supporters frame it as a fair, one-time contribution from those who have benefited most from California’s economy to address inequality and budget shortfalls, estimated at $19 billion annually for Medi-Cal alone under potential federal changes.

Legal and Economic Context

California’s Legislative Analyst’s Office estimates it could generate tens of billions in one-time revenue but lead to long-term annual losses of hundreds of millions in state income taxes if billionaires relocate.

The initiative is opposed by Governor Gavin Newsom and many tech leaders, who argue it could be blocked via lawsuit under provisions allowing the state to halt measures that impede governance

California’s top marginal rate is 13.3% on ordinary income and capital gains (treated as income). Billionaires often realize massive gains from stock sales, IPOs, or venture exits. If the $1 trillion in exited wealth previously generated even a conservative 5% annual return (e.g., via investments), that’s $50 billion in potential income/cap gains subject to tax—yielding about $6.65 billion annually in state revenue at the top rate. More realistically, with variable realizations (tech founders cashing out stakes), losses could exceed $10-20 billion per year statewide from reduced high-earner contributions.

Billionaires employ large staffs (household, security, administrative) and fund ventures that create jobs. A single billionaire’s operations might support hundreds of roles with salaries totaling tens of millions annually. At scale, the $1 trillion exodus could displace thousands of high-paying jobs (in tech, VC firms), leading to $5-10 billion in lost annual wage income statewide.

11 thoughts on “At Least Half of the $2 Trillion in Billionaire Wealth Have Left California”

  1. What did they ever do to help California? They benefited from our workforce but they give oh so little back to the state. Here in Santa Clara our food banks are in desperate for contributions and a single generous billionaire could solved this, yet here we stand…

    • Pretty sure that, when you benefit from a workforce, you “pay” the workforce. And that’s all you owe anybody for benefiting from it.

      I am so sick of this “give back to” rhetoric. You give back to people who’ve given you something. If you paid for everything you got, there’s nothing to give back, you’re already square.

      • I don’t suppose, that you’ve ever worked at a startup? Somebody comes up with an idea (often with serious flaws) and they get money from some investors. Note, typically the crazier the idea is, the bigger the ego of the founder is. Then they get some workers (often fairly gullible) with a dubious pitch of how many billions there company will be worth, to work like dogs for years in return for some modest number of stocks that most often are totally worthless. Once in a blue moon one of these average workers strikes it rich but rest of the time they just get burnt out. So no, I don’t think it’s a square deal, not in the least. Note, I base this on some 20 years spent a various startups (look me up on if don’t believe me.)

  2. California’s “original sin” was proposition 13 in the late 1970s. That cut off the best local and state taxation method, began the long slide to poorer services – particularly for schools – and began the untenable lack of affordable housing which has made California the #1 state for homelessness.
    Incomes and sales taxes are less reliable, discourage working, and drive out businesses and rich people. Asset seizure like this would be unworkable (how much is that Ferrari or Picasso worth? Where are the offshore assets? etc.). Wealthy people have options and won’t wait for a referendum that even the governor opposes.
    The property tax is really two taxes: one on improvements and new buildings, which is bad and should be abolished entirely to encourage improvements and buildings. One on land, which should be roughly doubled to make up for the lost revenue on the first part and more importantly, to encourage improvements and new buildings, while discouraging hoarding and land speculation with the higher tax. The Land Value Tax is fair, can’t be avoided, and does not discourage working. It has a long and proven history.

    • Prop 13 was simply a bad solution to a difficult problem. All prperty tax needs to increses at the rate of the actual need and not some atifical rate. Giving a permenate pass based on the original property price plus a capped increase is wrong.

      Note, as a California home owner I benefit from prop 13.

  3. Billionaires are leaving Democrat run New York and California and moving to Republican run Florida and Texas.
    New York and California are becoming Europoor, high income taxes, cradle to grave welfare States.
    Florida and Texas are American capitalist, no state income tax, ‘pro-business’ states.

  4. They may have left California, but will California admit they’ve left? I think not. They’re going to have a real legal battle ahead.

    • Looked more closely, the union already dropped from Jan 1 2025 to Jan 1 2026. They see the legal battle they face and realize the 2025 part will never stand. It is game on for the wealthy to support opposition to the socialists-progressives. Gavin Newsom is on the side of the billionaires, as his father and him have been close partners with the Getty’s. Even Reid Hoffman and other left billionaires are aligned with stopping this.

  5. The retroactive part of this bill makes it an “ex-post facto” bill, which is specifically prohibited by the U.S. constitution. It would be very easy to get an injunction against this law (assuming it passed) until it underwent federal judicial review (and this would definitely be taken up by SCOTUS as it is a slam-dunk). But the longer term issue remains. CA government employees are parasites who will create another bill without the retroactive parts which could then pass.

    So the message remains the same. Anyone who is a producer needs to get the hell out of CA.

    • Historically, the courts have been EXTREMELY reluctant to apply the ex post facto clause to anything except criminal law. And have specifically permitted retroactive taxation reaching back within the same year.

      Reaching back to a prior year might seem a stretch, except that taxation is the area where the judiciary are least inclined to find constitutional limits on governmental power. Economic liberty and protections have been disfavored ever since “Lochnerism” became a judicial swear word.

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