Wealth tax concerns are escalating in Silicon Valley as leading tech founders and investors warn a proposed California ballot measure could drive innovation and capital out of the state. The wealth tax proposal would impose a one-time 5% levy on California residents with assets exceeding $1 billion, applying retroactively to those living in the state as of Jan. 1, 2026.
The proposal is backed by the Service Employees International Union–United Healthcare Workers West, which argues the tax could help offset federal healthcare funding cuts. Even though the measure is still under consideration for the November ballot, prominent figures say the threat alone is already influencing decisions.
Palmer Luckey, cofounder of defense technology firm Anduril, warned the tax would force founders to liquidate major portions of their companies. He said it would require “founders like me to sell huge chunks of our companies” to pay for what he described as “fraud, waste and political favors for the organizations pushing this ballot initiative.” Luckey wrote that he already paid “hundreds of millions of dollars in taxes” before launching a second company employing thousands.
According to a New York Times report, billionaire investor Peter Thiel and Google co-founder Larry Page are also weighing whether to cut ties with California. If approved, the tax would allow payments over five years, meaning a resident with $20 billion in assets would owe $1 billion.
Billionaire investor Bill Ackman said California is “on a path to self-destruction” if the measure advances. Gov. Gavin Newsom said he opposes the proposal but urged restraint, calling it part of a broader debate over wealth inequality.
