Crypto billionaires in California are considering leaving the state due to a proposed 5% assets tax on those worth over $1 billion. The tax could bring in $100 billion from 200 residents. Investors like Peter Thiel and Larry Page have threatened to leave, sparking debate on the impact on state revenue.
The Service Employees International Union-United Healthcare Workers West proposed the tax in November 2025, requiring 850,000 signatures to be put on the 2026 ballot. A one-time $1 billion tax on residents worth over $20 billion is also included, targeting unrealized gains.
Prominent figures in the tech and crypto sectors, like Kraken’s Jesse Powell, have condemned the tax proposal, calling it theft. Others like Bitwise CEO Hunter Horsley claim that many wealthy individuals are considering leaving California due to the tax burden.
Critics argue that the tax could lead to a revenue loss for the state, impacting programs and services. However, data from past tax reforms in other countries and states suggests that the impact of wealthy individuals leaving due to taxes may not be as significant as feared.
Inequality.org notes that wealthy individuals tend to stay in their current locations due to family, social networks, and business knowledge, minimizing the risk of a mass exodus. Despite tax hikes in some states, the number of high-net-worth individuals has continued to grow.
The debate over the proposed tax in California has sparked discussions on wasteful spending and fraud in the state. Crypto billionaire David Sacks criticized the need for a wealth tax, attributing it to funding fraud. Allegations of fraud in Democratic-led states have led to federal investigations.
While the California tax proposal has caused concern among the ultra-wealthy, its impact on state revenue and programs remains uncertain. The potential exodus of crypto billionaires could have repercussions, but the long-term effects are yet to be seen.
Read more at Cointelegraph: Will Crypto Billionaires Actually Leave California After New Tax?