A proposed 5% tax on billionaires’ wealth in California has sparked backlash from crypto executives, who warn of capital flight and negative consequences. The tax initiative, the 2026 Billionaire Tax Act, aims to tax net wealth above $1 billion to fund healthcare and state programs. Some argue it may lead to billionaires leaving the state.

US Representative Ro Khanna is a vocal supporter of the wealth tax, advocating for better childcare, housing, and education. Critics like Castle Island Ventures founding partner Nic Carter and ProCap BTC chief investment officer Jeff Park fear the tax will prompt billionaires to move their capital out of the state. Norway’s similar tax led to a mass exodus of the wealthy and raised less money than expected.

Fredrik Haga, CEO of Dune, pointed out that Norway’s wealth tax resulted in a mass exodus of the wealthy and less revenue than anticipated. Austin Campbell and Hunter Horsley highlighted audit issues in California’s taxpayer fund spending, calling for better management rather than a new tax. The proposed tax may not achieve its intended goals and could lead to unforeseen consequences.

Read more at Cointelegraph: Crypto Industry Backlash to California Billionaire Tax