California has reportedly now seen an astonishing collapse in billionaire wealth over just the past month, with nearly $1 trillion reportedly vanishing amid fears over a proposed “Billionaire Tax,” according to one of the state’s wealthiest residents and most prominent tech investors.
The controversial proposal would impose a one-time 5 percent tax on individuals worth more than $1 billion as of Jan. 1, 2026. Even California’s Democratic governor, Gavin Newsom, has come out against the idea, warning it would drive wealth and investment out of the state.
Venture capitalist and former Facebook executive Chamath Palihapitiya sounded the alarm in a blistering post on X, claiming that more than $700 billion in billionaire wealth has already left California in just one month. Palihapitiya said the state had expected to tax roughly $2 trillion in billionaire wealth, but that figure has now dropped to about $1.3 trillion and is still falling.
Palihapitiya warned that by the end of 2026, California could be left with less than $1 trillion in billionaire wealth, along with decades of litigation. He called the situation a “complete and total unforced error” and questioned the absence of leadership as the damage mounted.
The mere possibility of the tax, which could appear on the ballot in November 2026 and be applied retroactively, has reportedly triggered a rush by California’s approximately 215 billionaires to establish residences and business operations in lower-tax states such as Florida, Tennessee, and Nevada.
The shift is already visible. More than 45 California LLCs tied to Larry Page have recently gone inactive or moved out of state, while a trust linked to him purchased a $71.9 million mansion in Miami’s Coconut Grove. An entity connected to his Google partner Sergey Brin has also dissolved or relocated 15 California LLCs to Reno, Nevada.
In-N-Out heiress Lynsi Snyder has relocated to Tennessee and opened a second corporate office there, further underscoring the growing exodus.
Palihapitiya said he is personally giving “serious consideration” to moving to Texas and warned that unless the ballot initiative is scrapped and wealthy residents are enticed to return, California’s budget could be thrown badly out of balance. He argued that without billionaire tax revenue, the state would be left with only two options: cut waste, fraud, and abuse, or raise taxes on the middle class.
Labor groups backing the measure see it differently. SEIU-United Healthcare Workers West, which is leading the push for the 2026 Billionaire Tax Act, says the revenue would help restore healthcare funding lost to federal cuts and support public schools. Union official Suzanne Jimenez described the tax as a modest, one-time levy and claimed billionaires would still be paying less than they did decades ago.
Even so, Newsom remains firmly opposed. His office reiterated that he has consistently rejected state-level wealth taxes, arguing they spark a race to the bottom by driving capital elsewhere.
Public opinion appears to be shifting in his favor. A new poll conducted by David Binder Research found that support for the measure dropped to 41 percent after voters heard arguments from both sides, while opposition climbed to 53 percent, signaling growing skepticism as Californians watch wealth flee the state.
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