Venture capitalist Chamath Palihapitiya says California’s proposed billionaires tax is accelerating the exodus of ultra-wealthy residents, a change he says will only get worse and won’t solve the state’s budget deficit.
Palihapitiya, who tracks capital flight from the Golden State, said California has lost about $1 trillion so far.
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“We had $2 trillion in billionaire wealth just a few weeks ago. Today, 50% of that wealth is gone – taking with them the revenue from income tax, sales tax, property tax and all their staff (along with their salaries and income taxes),” Palihapitiya wrote on X Sunday.
Although the measure remains under consideration for the November statewide ballot, some of Silicon Valley’s most prominent figures warn it could trigger an exodus of founders and capital.
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Chamath Palihapitiya, founder and CEO of Social Capital Hedosophia Holdings Corp., said $1 trillion has already left California because of taxes. (Michael Nagle/Bloomberg via Getty Images / Getty Images)
California has long depended on its billionaire class, among the nation’s largest, to help fund the state budget.
“California billionaires were reliable taxpayers,” Palihapitiya wrote.
“They were the sheep that could be sheared forever. Now, California will lose this revenue source forever. Unless this ballot initiative is withdrawn, we will not stop the exodus of billionaires. Without more wealthy people in California, the middle class will be left to foot the bill.”
His comments come as California Voters are considering a proposed ballot initiative, backed by the Service Employees International Union – United Healthcare Workers West, that would impose a one-time 5% tax on California residents’ assets worth more than $1 billion.
Supporters say the revenue could help offset cuts in federal health care funding.
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California Governor Gavin Newsom has previously said he is against the proposed billionaires tax. (Justin Sullivan/Getty Images/Getty Images)
In December, California Gov. Gavin Newsom declared himself opposed to the proposed tax on billionaires, while warning against panic caused by this measure.
“It’s nothing to panic about, but it’s part of a broader concern and narrative that has developed in this country of haves and have-nots, not just income inequality, but wealth inequality,” Newsom told an audience at the New York Times DealBook conference.
