Gov. Gavin Newsom's final State of the State address. (Photo: gov.ca.gov)
Bye Bye Billionaires: Gavin Newsom’s California Exodus
The total wealth that has left California is now $1T – we had $2T of billionaire wealth just a few weeks ago
By Katy Grimes, January 12, 2026 12:12 pm
California billionaires are leaving the state in record numbers, and taking their billions with them. According to one billionaire, more than $1 Trillion has already left.
Governor Gavin Newsom is pushing a retroactive billionaire tax targeting the roughly 220 billionaires residing in California in 2025, ignoring that these individuals are the most financially mobile and can live anywhere. Expecting them to remain in the state as if they will happily and willingly hand over even more of their wealth surely must be facetious.
SEIU is sponsoring the “2026 Billionaires Tax Act.” The measure will impose a one-time 5% tax on individual wealth exceeding $1 billion, Marc Joffe wrote for the Globe.
One-time tax… right.
Chamath Palihapitiya posted to X yesterday:
Unfortunate update as of today: More calls from friends. The total wealth that has left California is now $1T. We had $2T of billionaire wealth just a few weeks ago. Now, 50% of that wealth has left – taking their income tax revenue, sales tax revenue, real estate tax revenue and all their staffs (and their salaries and income taxes) with them. In other words, by starting this ill conceived attempt at an asset tax, the California budget deficit will explode. And we still don’t know if the tax will even make the ballot. California billionaires were reliable tax payers – 13.3% every year. They were the sheep you could shear forever. Now California will lose this revenue source FOREVER. Unless this ballot initiative is pulled, we will not stop the billionaire exodus. With no rich people left in California, the middle class will have to foot the bill.
Unfortunate update as of today:
More calls from friends. The total wealth that has left California is now $1T.
We had $2T of billionaire wealth just a few weeks ago. Now, 50% of that wealth has left – taking their income tax revenue, sales tax revenue, real estate tax revenue… https://t.co/IQZFieRgL7
— Chamath Palihapitiya (@chamath) January 11, 2026
Palihapitiya is a Canadian-American venture capitalist and entrepreneur, and one of the All-In podcasters with Jason Calacanis, David Sacks, and David Friedberg. Palihapitiya founded and leads Social Capital, which he launched in 2011 after serving as a senior executive at Facebook from 2007 to 2011.
He followed up the X post with:
State income taxes on the middle class would need to go to 20% to make up for no/minimal income tax revenue from Billionaires. That’s the math. If folks want this, then so be it.
and:
The proposed tax starts with billionaires but is allowed to apply to others as the legislature sees fit. So eventually “rich” will include everyone.
When some attempted to mock the billionaire entrepreneur, Palihapitiya explained more deeply about the exodus and what it means for everyone else in California:
It’s about 40 people/families. I suspect more will move in Q1. Whatever you believe about wealth and inequality, the math ain’t mathin’ anymore because of this exodus. However much in “extra” taxes they were targeting with this ballot initiative isn’t valid anymore and they need to update their assumptions before continuing to push for it. And anyone that signs the petition should understand this new math. Current course and speed will create a huge new budget deficit that was entirely avoidable. Sadly and historically, taxes always have a way of coming for the middle class because, collectively, they are the largest source of potential tax revenue for the government.
The damage California Governor Gavin Newsom has inflicted on the state is irreparable at this point, and should be a disqualifier for any future political aspirations. Many believe he should be prosecuted, but it won’t be by California’s Attorney General, who has been on Newsom’s side, hurting the people of the state the way tin pot dictators do. A “tin-pot dictator” refers to an autocratic ruler who lacks political credibility and often has delusions of grandeur, typically characterized by their insignificant or petty nature… thy name be Gavin Newsom.
Attorney General Rob Bonta, who wants to run for re-election and keep his job, issued a ludicrous official title and summary for the California Billionaire Tax Act – and you won’t be disappointed in the laughable language attempting to hide the corruption:
IMPOSES ONE-TIME TAX ON CERTAIN INDIVIDUALS AND TRUSTS. INITIATIVE CONSTITUTIONAL AMENDMENT AND STATUTE.
As the Globe recently reported, those “certain individuals and trusts” are the state’s billionaires, also known as employers, job creators, innovators and entrepreneurs. The 2026 Billionaire Tax Act is expected to generate $100 billion in revenue… plenty to cover Governor Gavin Newsom’s current $18 billion budget deficit and anticipated deficits of more than $30 billion… and the $76 billion in fraud recently exposed by the State Auditor…
With $100 billion coming in to the state’s coffers, does anyone really believe this is a “one-time tax” on billionaires.
As we reported, entrepreneur David Sacks weighed in explaining, “To be clear, the Billionaire Tax Act in California is not (just) an unrealized gains tax. It’s a 5% across-the-board confiscation of net worth. It applies even if one has already realized and paid taxes on the entire amount.”
This is double taxation and unconstitutional, and California’s billionaires know it.
Newsom might find that lowering tax rates results in higher rather than lower tax revenues, as the Laffer Curve has shown time and time again.
Art Laffer, who created the Laffer curve, an economic hypothesis that shows the relationship between tax rates and the amount of tax revenue collected by governments, left California more than two decades ago for Tennessee. The Laffer curve shows that there is a certain point between 0% and 100% where tax revenues are maximized. He saw it coming and tried to warn us.
A California native and Navy mom, Katy lives in Sacramento, CA.
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Suicidal CA leadership. Amazingly STUPID, but apparently purposefully so.
Sure, that’s what we need in CA —- more “action” from idiotic “leadership” that deals a death blow to residents’ morale. Because, as usual, this crap is causing a reaction before it’s even “official.” They haven’t done enough of it already, right?
Sound familiar?
The Unions are the ones. Citizens taxing other Citizens for Administrative Expenses to be paid first. How much in salaries, benefits, pensions, etc before distribution toward the feel good sell?
Yes, of course, the UNIONS. The greedy, grabby, public employee unions are destroying — have destroyed? — California. Governor, state officeholders, legislature, and others have gone along with their money grab and demands for fear of not receiving the dirty cash they bestow on compliant, mostly Dem, politicians.
A Trillion here, a Trillion there and pretty soon we are talking real money. 😉
No kidding, it’s astounding.
For 51% of the CA voters, the proposed initiative will be great, since they vote Yes for initiatives that sound like someone else will pay for it and not the citizens. Yeah, many voters are that ignorant.
While wealthy billionaires in California have the means to flee the Democrat’s wealth confiscation, many middle class and working class Californians can’t easily escape the state for various reasons? Unfortunately they’ll be tapped next to fill the reckless budget deficits inflicted by Hair-gel Hitler Newsom and the criminal Democrat thug mafia that controls the state?
The Unions are the ones. Citizens taxing other Citizens for Administrative Expenses to be paid first. How much in salaries, benefits, pensions, etc before distribution toward the feel good sell?
Do you need a tax on billionaires if there is no one to tax?
Something is off here.
Most billionaires are “asset rich”. IOW, their wealth is equity in their companies. Their “wallet” is not a billion dollars in a checking account.
So now California says in effect: “We want 5% of your assets.” That is an entirely different thing. So the billionaire might say, “Okay. I will liquidate my LA Factory, and give you the billion. Enjoy paying 100 workers unemployment.”
The posts I have read here miss the fundamentals then build a rickety argument on top of it. My post is a micro example of an overlooked fundamental fact.
If you are saying this proposal has not been thought through at all, and has complications and very bad effects that most of us cannot see or foresee, I’m sure you’re 100% correct! Nothing new there when it comes to this kind of legislation in California (and other blue states), right?
It’s enough —- as we’ve seen in other legislation —- for the scoundrels who are proposing this stuff to invoke “billionaires” or whatever and let the Marxist propaganda and emotions take over to win votes. The so-called “have-nots” who “hate” billionaires angrily vote against those they “hate,” but with zero understanding of how they may actually be screwing themselves.
But you can bet California’s wealth class understands what the result of such a proposal will be and that’s why the mere suggestion — before anything is even official —- has them leaving the state in droves.
That’s the “progressuve” mindset…
Legislate based upon EMOTION, completely ignorant of financial ramifications or LOGIC, but this appeals to the TDS crowd, apparently…
The rest of us with brains are exploring life in Texas and Tennessee and Idaho….
Beside billionaires, the people leaving California are high income earners. For instance, households moving from California to Texas had an average adjusted gross income (AGI) of $145,960. This spells doom for the state.
Must be the pits for liberals. They love living with their enemies.
LOL I wish Newsom supported this, unfortunately he’s a billionaire bootlicker just like everyone else here.
It’s every 20 years and this time 25 because of Covid. It’s a great place to live, but you have to be able to do so. I am from San Diego and the corruption is absolutely unbelievable. I’ve never seen anything like it in 60 years. Such a shame.