In the lead-up to New York City’s mayoral election last fall, we examined the claim that the city’s millionaires would run for the hills if Mayor Zohran Mamdani won and followed through with his proposal to raise taxes on the rich. We devoted a whole Closer Look to it, our members spoke to the press about it, and our Chair, Morris Pearl, even took to the streets of Manhattan to film a now-viral social media video addressing it too.
Months later, we’re at it again—just on the other side of the country.
In late October, news broke that organizers in California had filed a measure, the “2026 Billionaire Tax Act,” to appear on the November 2026 ballot that would impose a one-time 5% tax on the state’s billionaires. Since then, there has been a relentless onslaught of panicked headlines that the proposal will lead the Golden State’s 200 or so billionaires to flee en masse.
November is a ways away, but given its dominance in the headlines lately, we wanted to break down what this measure and conversation is really about: the tax migration myth that just won’t die. We’ll start by giving you the facts about the proposal and the relocation fuss that certain billionaires and politicians are making about it. Then, we’ll share research findings and some of our personal experiences that underscore why it’s unlikely the wealthy will leave if you tax them more. Finally, we’ll close by offering some broader reflections on the California wealth tax ballot initiative and the importance of ensuring that wealthy people pay their fair share at all levels of government.
Here’s the skinny on the CA wealth tax ballot measure
A labor union representing health care workers, Service Employees International Union-United Healthcare Workers West, is the main organizer behind the “2026 Billionaire Tax Act.” The Act would establish a one-time, 5% emergency tax on the net worth of billionaires living in California as of January 1, 2026. The union estimates that roughly 200 California billionaires would be affected by the measure. Taxpayers would have the option of spreading payments out over five years; deferring the tax if, for example, their assets are in start-ups; and submitting independent third-party valuations of their assets if they believe the government didn’t assess them correctly.
Organizers estimate the tax will raise about $100 billion in revenue. 90% of the funds will be directed to healthcare, while the remaining 10% will be allocated for education and food assistance programs. California’s healthcare system in particular is facing a crisis because of federal cuts to Medicaid and Affordable Care Act subsidies brought on by the GOP’s One Big Beautiful Bill Act. If no action is taken, over the coming years, insurance premiums will go up; millions of Californians will lose healthcare coverage; hospitals, clinics, and nursing homes may close; and nearly 145,000 jobs are expected to disappear. Organizers are aiming for the revenue from the billionaire tax to prevent this crisis from happening.
The California billionaire tax is far from a done deal. Organizers will need to gather nearly 900,000 signatures to even get it on the November ballot. Then, the initiative will need to garner majority approval from voters to become law.
Still, that hasn’t stopped some California billionaires and politicians from voicing their opposition. Gavin Newsom and many of the current candidates vying to replace the term-limited governor have publicly come out against it, expressing fears that it would drive billionaires to leave the state and take their valuable tax dollars and innovative minds with them. A handful of billionaires have said on and off the record that they will move because of the tax. In fact, high-profile names like Larry Page, Peter Thiel, and Sergey Brin have said they’ve already moved some of their offices outside of the state.
Fears of a California billionaire exodus are overblown
(Parts of this section are lightly edited from the Closer Look that we published in July that debunked the myth of millionaire tax migration.)
There is a significant amount of research and evidence that defies the idea that wealthy people in America are leaving higher-tax places in droves, or that they will pick up sticks if you dare to raise their tax bills like California organizers are looking to do now.
In his 2017 book, The Myth of Millionaire Tax Flight: How Place Still Matters for the Rich, Cornell University Professor Cristobal Young analyzed thirteen years’ worth of tax returns from US millionaires to better understand their migration patterns. He found that just 2.4% of millionaires move to a different state every year and that a mere 0.3% of them moved to lower-tax states specifically.
In December 2023, the Fiscal Policy Institute published a report that revealed the millionaire population in New York state—which has one of the highest tax burdens in the country—is growing, even after they faced tax hikes in 2017 and 2021. The Institute for Policy Studies found something similar when they studied Washington and Massachusetts after they instituted tax hikes on their richest residents in 2022, with both states experiencing an increase in their millionaire populations over the last few years. California’s own history refutes the myth too. After income taxes were raised on the state’s high earners in 2012 with the passage of Proposition 30, the state generated billions in new revenue and millionaires did not flee.
For what it’s worth, data also show that most millionaires today live in higher-tax states. Big higher-tax states like California and New York have the most millionaires in absolute terms, while smaller higher-tax states like New Jersey, Maryland, and Connecticut have the highest proportions of millionaires in their populations.
Some commentators have also raised the point that, given that the California wealth tax ballot initiative would be a one-time, 5% levy on billionaires’ net worth in 2025, California billionaires will still be liable to pay it even if they decide to move now or in the future.
Outside of these hard numbers and facts, we also have our personal experiences as people of wealth to bring to bear to this question of tax migration. Many of us choose to live in higher-tax states and cities because they tend to provide a higher quality of life. States with higher taxes perform better on a variety of metrics compared to their lower-tax counterparts; they have lower crime rates, better schools, cleaner environments, and more.
Three of our California members—Dave Nixon, Maureen Kennedy, and Scott Ellis—recently spoke to the press about the wealth tax proposal and why they’re happy to pay higher taxes as wealthy people if it translates into a higher quality of life. You can check out their hits in Fortune, 48 Hills, and Business Insider.
To be fair, the circumstances around the California wealth tax measure are unique. The research we have on the myth of millionaire tax migration hasn’t analyzed the effects of a tax anywhere nearly as large as this proposal, nor one specifically levied on billionaires. Billionaires like Nvidia CEO Jensen Huang would potentially face a tax bill as large as $8 billion, which is nothing to sneeze at. There are also legitimate predictions that the tax will not end up being a one-time thing and that voters will want to extend it.
But even so, Jensen Huang himself—who, as of this writing, is the eighth richest man in the world—has said that he’s “perfectly fine” with potentially paying the wealth tax. Which suggests that characters like Larry Page, Peter Thiel, and Sergey Brin may not be good representatives for their billionaire peers—especially as they’ve only said they’ve moved their offices, and not their personal residences.
Conclusion
In his Business Insider profile, Patriotic Millionaire Scott Ellis offered his perspective on the California wealth tax initiative: “Instead of us talking about the fact that millions of people are going to be either losing healthcare or paying much more for healthcare, we’re worried about the 200 really rich people who might move.” That’s a pretty powerful indictment against where our priorities are right now as a nation.
Given all the evidence we have on hand along with our personal experiences, we would be pretty surprised if the California wealth tax ended up sparking anything resembling an exodus of the state’s billionaires. But even if it does, in our minds, that should strengthen, not weaken, lawmakers’ resolve to work together across the country to institute minimum tax standards on wealthy people like us. Billionaires shouldn’t get to “race to the bottom” on Tax Day, especially while millions of their fellow Americans dutifully pay tax every year as they live paycheck to paycheck.
If the California wealth tax becomes law and billionaires have to pay up, they will still have more money than they can ever possibly spend in one lifetime. It’s safe to assume that most of them will still be billionaires. In other words, to quote Jensen Huang, all signs point to them being “perfectly fine.”
We’ll keep our eye on the California wealth tax battle and have more to say on it in the weeks and months to come. But for now, do us a favor: don’t buy into the myth that the wealthy will leave if you tax them.