California’s Proposed 2026 Billionaire Tax Act: A Fast Track to Economic Exodus in the Golden State

When I arrived in California in 1990, Pete Wilson had just become governor and the state felt like morning in America all over again. Businesses were hiring, real estate hummed, and the mood was upbeat. As a conservative shaped by the Reagan years of my youth, I believed in opportunity through hard work, discipline, and limited government. More than three decades later, with those same principles guiding my career in financial services and investment management, I have watched single-party rule turn the Golden State into a cautionary tale. The proposed 2026 Billionaire Tax Act now risks accelerating that decline at warp speed.

The measure, officially Initiative No. 25-0024 and cleared for signature gathering by Attorney General Rob Bonta in December 2025, would impose a one-time 5 percent excise tax on the net worth of individuals with assets exceeding 1 billion dollars who resided in California as of January 1, 2026. The tax phases out between 1 billion and 1.1 billion dollars. Valuation occurs as of December 31, 2026, with payments spread over five years at roughly 1 percent annually. Organizers, led by the Service Employees International Union United Healthcare Workers West and recently amplified by Senator Bernie Sanders at a February 19, 2026, rally in Los Angeles, estimate it could raise about 100 billion dollars. Ninety percent would fund healthcare programs to offset federal reductions, with the remaining 10 percent allocated to K-12 education and food assistance.

On paper this sounds like a simple ask of the ultra-wealthy. In practice, as someone who has managed client portfolios for decades and held the full suite of FINRA licenses that demand daily navigation of capital markets, I recognize it as a textbook example of punishing success while ignoring economic incentives. Wealth taxes have failed repeatedly elsewhere, and California is already seeing the preview.

Consider the European record. Fourteen countries adopted broad wealth taxes between the 1960s and 2010s. Most repealed them after capital flight, disappointing revenue, and crushing administrative costs. France’s Solidarity Tax on Wealth drove an estimated 42,000 millionaires to leave between 2000 and 2012, according to multiple economic analyses, before its repeal in 2018. The Organization for Economic Co-operation and Development reports these taxes averaged just 0.2 percent of GDP in revenue, far below projections, while distorting investment and prompting relocation. Norway experienced a surge in ultra-wealthy departures when its wealth tax rose modestly in 2022. These outcomes are not theoretical; they are documented patterns of behavior among mobile high-net-worth individuals and the businesses they control.

California’s own data tells the same story. The state already leads the nation in net domestic out-migration, with U-Haul reporting six consecutive years of residents hauling possessions to lower-tax destinations such as Texas, Florida, Nevada, and Arizona. IRS migration statistics show California lost over 100 billion dollars in adjusted gross income from high earners between 2020 and 2022 alone. Public Policy Institute of California figures indicate 3 percent of businesses relocated out in 2025. High-profile examples include Chevron’s headquarters move to Houston, Tesla’s earlier shift to Texas, and Oracle’s relocation. In direct response to this proposal, Google co-founders Larry Page and Sergey Brin have moved corporate entities out of state. Mark Zuckerberg relocated to Florida. Peter Thiel and David Sacks have deepened ties elsewhere. Investor Chamath Palihapitiya publicly estimated 700 billion to 1 trillion dollars in wealth already departing or preparing to leave. The top 1 percent of earners already shoulder roughly half of California’s personal income tax revenue. Chasing them away does not solve budget shortfalls; it deepens them.

One can almost hear the dry echo of classic rock lyrics: you can check out any time you like, but the state will still try to tax you. The proposal is retroactive to January 1, 2026, residency, meaning even those who leave before the November vote remain on the hook. Congressman Kevin Kiley’s Keep Jobs in California Act of 2026 seeks federal protection against such retroactive grabs precisely because they are fundamentally unfair and economically self-defeating.

Educated readers understand that wealth is not idle cash in a vault. It funds companies that employ tens of thousands, finances startups that drive innovation in Silicon Valley, and supports real estate and infrastructure projects across the state. A 5 percent levy forces liquidation, restructuring, or relocation, each carrying real costs to jobs, tax revenue, and economic activity. Valuation of illiquid assets such as private equity stakes or family businesses invites endless disputes and high compliance expenses, further eroding any net gain.

Raising awareness means confronting the root issue: California’s fiscal pressures stem less from insufficient revenue and more from unchecked spending, regulatory overload, and policies that deter investment. The conservative solution is not to extract more from the productive few but to restore the conditions that made the state thrive under Governor Wilson. Voters should reject this initiative at the ballot. Instead, pursue spending discipline through performance audits of healthcare and education programs. Implement tax reform that broadens the base while lowering marginal rates to encourage work, saving, and risk-taking. Reduce bureaucratic red tape that inflates costs for businesses and families alike. Promote pro-growth policies such as regulatory relief and incentives for domestic investment, echoing the supply-side successes of the Reagan era that lifted all boats. Conservation and regenerative farming practices deserve support on their merits as sound stewardship, not as vehicles for expansive mandates.

As a father, coach, and community volunteer who still believes in accountability, integrity, and the reality of only two sexes, I have seen how rewarding effort and holding individuals’ responsible builds stronger communities than redistribution ever can. Term limits for legislators and a congressional stock-trading ban would inject similar discipline at the state and federal levels. California does not need another experiment in soaking the rich. It needs to become a destination for success again, the way it was in 1990.

The choice in November 2026 will be clear: continue the path of one-party experimentation or return to proven principles of limited government and opportunity for all. The Golden State’s future depends on getting this one right.