Known as the "2026 Billionaire Tax Act," the initiative proposes a one-time 5% wealth tax on California's billionaires, payable over five years. 90% of the tax revenue would be used to offset the $100 billion (€85.7 billion) in budget cuts imposed by the "One Big Beautiful Bill," the budget law that the United States Congress passed in July 2025, under the auspices of President Donald Trump. The remaining 10% would go to food assistance programs and public education, which is in a curiously dire situation for such a wealthy state.
The ballot initiative is still just a proposal: It has not yet received the 874,000 signatures required for it to be put to a vote by Californians in November, and the state's Democratic governor, Gavin Newsom, does not support it. Nevertheless, the initiative has threatened to drive the Silicon Valley billionaires out of the state.
The initiative has resulted in panic among the billionaires. According to the press, the biggest names in Silicon Valley all took steps to move before December 31, 2025, to minimize their exposure to the tax, which would be calculated retroactively, back to January 1. Larry Page (with a net worth of $276 billion), one of Google's founders, had his holding company move its headquarters to the tax-friendly East Coast state of Delaware, relocate three of its companies to Florida and purchased two homes in Miami, for $173 million. Larry Ellison (net worth $245 billion), cofounder of Oracle, sold his $45 million home in the hills above San Francisco, though he had already moved his tax residence to Hawaii in 2020, just like Elon Musk (head of the social media platform X and Tesla), who relocated to Texas. Meanwhile, Peter Thiel, cofounder of PayPal and Palantir Technologies, who is worth $26 billion, has increased his presence in Florida.