California Faces Accelerating Billionaire Exodus Amid Proposed Tax Hikes
SAN FRANCISCO, Calif. — As California lawmakers consider two significant tax proposals targeting the ultra-wealthy, a growing chorus of insiders warns that the state could face an unprecedented exodus of billionaires and key investors in 2026. Allison Huynh, a Silicon Valley tech entrepreneur and former fundraiser for Presidents Barack Obama and Joe Biden, cautioned that the combination of an annual wealth tax and a one-time billionaire tax could trigger a “mass migration” of business leaders and innovators out of the state.
Huynh, managing partner at Alo Ventures, described the tax proposals as “rage bait” designed to mobilize voters but with potentially catastrophic economic consequences. The annual wealth tax would impose a 1 to 1.5 percent levy on assets exceeding $50 million, including illiquid holdings such as real estate and artwork, calculated on paper valuations rather than cash flow. Meanwhile, the 2026 Billionaire Tax Act would levy a one-time 5 percent tax on assets valued above $1 billion, encompassing business holdings and other investments.
“It’s like a restaurant hiking prices on bad dumplings,” Huynh said, referring to the proposed tax hikes. “Instead of lowering the price, they increase it, driving customers away.” She warned that the impact would ripple beyond billionaires themselves, affecting entrepreneurs and investors who drive innovation in sectors like artificial intelligence, healthcare, and robotics.
Recent public filings reviewed from the California Secretary of State reveal that prominent figures such as Google co-founder Larry Page have already begun relocating business entities out of California ahead of the January 1, 2026 residency date linked to the new taxes. Page’s family office, Koop LLC, and his influenza research fund, Flu Lab LLC, no longer list California addresses, while his flying-car startup, One Aero, now cites Florida as its primary location.
Oracle founder Larry Ellison has also signaled a potential retreat from California, reportedly selling his San Francisco home in a transaction that could be the city’s largest real estate deal of 2025, according to reports from major outlets like the New York Post. Although details remain unconfirmed, the sale underscores a broader trend of wealthy Californians divesting from the state.
Economists and policy analysts note that California’s tax environment has long been a point of contention for high-net-worth individuals. The state already imposes some of the highest income and capital gains taxes in the nation. The proposed wealth and billionaire taxes would mark a significant escalation, prompting concerns about long-term economic vitality.
As California debates these measures, the potential for a brain drain and capital flight has drawn attention from federal observers and economic experts. The U.S. Census Bureau has documented ongoing population shifts from high-tax states to more business-friendly locales, a trend that may accelerate if California’s proposals pass.
Huynh’s warning comes amid a broader national conversation about wealth inequality and taxation, with California often at the forefront of progressive tax policy experiments. However, the exodus of billionaires and influential investors could undermine the state’s reputation as a global innovation hub.
“This is not just about billionaires leaving,” Huynh emphasized. “It’s about the entire ecosystem of innovation and investment that supports jobs and economic growth.” As the state legislature prepares to vote on these proposals, many will be watching closely to see whether California can balance fiscal goals with maintaining its competitive edge in the global economy.
For more information on California’s tax policies and economic data, visit the California Franchise Tax Board and the Congressional Budget Office websites.
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