California crypto billionaires are threatening to leave the state over a proposed wealth tax they consider unfair. The exodus threats follow a ballot measure introduced by the Service Employees International Union-United Healthcare Workers West that would impose significant taxes on the state’s wealthiest residents. While the law being proposed seems to be designed for the greater good, the 1% of the 1% in the state consider it unsatisfactory and unfair, with some going as far as calling it thievery and extortion.
The proposed tax specifically targets residents with assets exceeding $1 billion, potentially affecting California’s growing community of cryptocurrency investors. For those building wealth in the crypto sector, seeking to capitalize on the next cryptos with 100x potential and minimal upfront investment that promise bumper returns, the measure represents a significant policy shift that could affect long-term financial planning in the state. Here’s the lowdown.
The Service Employees International Union-United Healthcare Workers West has proposed that residents of California with assets exceeding $1 billion be subject to a one-time 5% tax on those assets. In addition to the 5% tax, residents worth over $20 billion will be asked to contribute $1 billion. The idea behind these taxes is to offset federal funding for healthcare, with proponents aiming to raise about $100 billion from 200 residents in the state. Before it can be ready for a popular vote in November 2026, 850,000 signatures will be required to place it on the ballot.
Naturally, this has not been without criticism, with many residents quite vocal about how outlandish the proposal is and how it will inevitably drive billionaires out of the state and reduce crucial tax revenue. The co-founder and chairman of Kraken, one of the popular cryptocurrency exchanges, calls the proposal an outright theft. Unequivocally, he believes that this will be the straw that breaks the camel’s back and is convinced that he and his billionaire friends will be pushed with little choice but to take their philanthropy, jobs, and spending to another state.
These sentiments are echoed by Hunter Horsley, the CEO of Bitwise, who believes that this proposal is being largely unfair to many of the people who have made the state great. Many of whom are now in discussions to leave or have made final decisions to leave within the next 12 months. Chamath Palihapitiya spoke against the proposed “Billionaire Tax,” saying it has already done irreparable damage. The former Facebook Exec and venture capitalist said people with a collective net worth of over $500 billion have already left the stake, unwilling to take part in this “unlawful asset seizure tax.”
History suggests these exit threats are hollow. Billionaires rarely relocate over tax changes. Moving costs, business ties, and lifestyle anchors keep them rooted. California survived similar threats before. Unless mass departures actually materialize by 2026, this looks like tactical posturing from the crypto elite.
