California's proposed 5% wealth tax on billionaires worth over $1 billion has united Silicon Valley's tech elite

A plan to collect a 5% tax from California’s wealthiest residents has brought together tech industry leaders who rarely agree on politics, uniting them against a measure they say could drive them out of the state.

The tax proposal, introduced in October by the Service Employees International Union-United Healthcare Workers West, targets people with assets worth more than $1 billion. If approved, it would be a one-time collection from roughly 200 individuals and bring in an estimated $100 billion for the state.

According to The Wall Street Journal, dozens of technology executives have been talking about the measure in a private group chat on Signal named “Save California.” The group includes Palmer Luckey from defense tech company Anduril, David Sacks, who now works on cryptocurrency policy for the Trump administration, and Chris Larsen from Ripple, who previously gave significant donations to Kamala Harris.

In their messages, some have called the proposal “Communism” while others say it lacks clear details. Many worry that tech company founders would leave California, hurting the region’s economy. Some members wrote about wanting California to encourage growth and job creation instead.

Several participants argued that the state should eliminate wasteful spending and fraud before looking for new money. Others pointed to posts from New York hedge fund billionaire Bill Ackman, who suggested closing a tax break used by the very wealthy as a better way to raise funds.

A few California billionaires have already started moving. Peter Thiel’s investment company Thiel Capital, mostly located in Los Angeles until now, recently signed papers for office space in Miami.

Google’s co-founders, Larry Page and Sergey Brin, who each have fortunes exceeding $250 billion, have been looking at houses in Florida. Page spent $173.4 million on two waterfront properties in Miami, The Wall Street Journal reported on Wednesday. Brin is talking about purchasing a Miami residence as well.

In late December, Garry Tan, who runs the startup program Y Combinator, wrote on X that his organization might need to look at opening programs in Austin or Cambridge if the tax passes.

How the tax would work

The proposed measure would apply to all of a person’s assets worldwide, including shares in both publicly traded and private companies, plus items like art. It would not count certain retirement accounts or real estate. To get on the November ballot, supporters need about 875,000 signatures. A simple majority of voters would need to approve it. The tax would apply retroactively to anyone who lived in California on Jan. 1, 2026.

Nvidia’s CEO Jensen Huang, who lives in the Bay Area and has roughly $150 billion, said he would accept the tax.

The union estimates the money would help offset healthcare funding cuts in the Republican tax bill that President Trump signed last year. Debru Carthan, who serves on the union’s executive committee, said in a statement: “We’re simply trying to keep emergency rooms open and save patient lives…the few who left have shown the world just how outrageously greedy they truly are.”

Some chat members said they don’t want to leave California, where their families live, but feel frustrated with Rep. Ro Khanna, whose district covers Silicon Valley. He has publicly supported the tax. The New York Times previously reported that some billionaires privately discussed trying to remove Khanna from office.

Search for compromise solutions

Khanna said in an interview that the tax needs adjustments so it doesn’t affect shares that people can’t easily sell, or voting shares. “There has to be some provisions in addressing that,” he said. He’s working to get tech leaders and union representatives talking.

David Gamage, a law professor at the University of Missouri who helped write the proposal, said people wouldn’t be forced to sell their shares. They could borrow money using their assets or delay payments.

Some billionaires have suggested giving the government stock for about 10 years as a no-interest or low-interest loan, taxing loans made using assets, or only taxing publicly traded stock. Phone discussions are planned for next week.

On the Signal chat, some participants have raised concerns that economic growth slowed in countries that enacted wealth taxes. Discussion also touched on the benefits Silicon Valley gets from having tech founders, companies, investors, and universities clustered together. Some feared an exodus would reduce this advantage.

Supporters of the tax point to the growth of many California companies, including recent gains in artificial intelligence, and say the state’s billionaires would remain among the world’s richest after the tax.

Advisers working with the union say the 5% rate is modest because billionaires’ wealth has been growing an average of 7.5% yearly, accounting for inflation.

San Francisco accountant Richard Pon, who works with extremely wealthy clients and typically votes Republican because of tax views, supports this proposal. “I’m not going to be a billionaire,” Pon said. “It’s never going to impact me.”

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