Did California lose Larry Page? The Google and Alphabet co-founder, who stepped back from daily operations in 2019, has watched his net worth skyrocket from about $50 billion at that time to an estimated $260 billion today. His departure from full-time work certainly hasn’t hurt his finances. Last year, a proposed ballot initiative in California aimed at a one-time 5 percent wealth tax on billionaires like Page caused some to consider leaving the state before the tax, if approved, would retroactively take effect. Reports from The Wall Street Journal suggest that Page has been among those considering a move, recently spending over $170 million on two homes in Miami. His co-founder Sergey Brin might also be joining him in Florida.
The two former California icons are just part of the roughly 250 billionaires affected by this proposal. It’s unclear how many actually left for Florida, Texas, New Zealand, or even a space station. However, many wealthy individuals voiced their frustration over the proposal, which will make it onto the November ballot if it garners around 875,000 signatures. Hedge fund mogul Bill Ackman labeled it “catastrophic,” while Elon Musk, who holds the title of the world’s richest man, argued he already pays a substantial amount in taxes, so much that he claimed his tax return once crashed the IRS’s computer.
Even with the enormous tax bills some billionaires face, those amounts are often much lower as a percentage of income compared to what many teachers, accountants, and plumbers pay yearly. If Musk, worth about $716 billion, were subjected to a 5 percent wealth tax, he’d still have around $680 billion left—enough to buy Ford, General Motors, Toyota, and Mercedes, all while remaining the wealthiest person in the world. (For the record, he’s no longer subject to California taxes; he moved to Texas a few years ago.)
California’s politicians, including Governor Gavin Newsom, typically oppose the initiative. An exception is Representative Ro Khanna, who expressed to WIRED that he supports “a modest wealth tax on billionaires to tackle staggering inequality and ensure healthcare for all.” Khanna may face backlash for this stance, potentially leading to a primary challenge backed by wealthy donors. A more cautious approach comes from San Jose mayor Matt Mahan, who tweeted against the bill, arguing that passing the wealth tax would be detrimental to California. When I spoke with Mahan, he stressed the importance of maintaining California’s innovation economy, which drives economic growth and opportunity. Though Mahan isn’t personally wealthy, he is closely linked to billionaires and was once a CEO of a company co-founded by former Facebook president Sean Parker.
Given the ability of the rich to relocate, there are genuine concerns in California regarding the implications of a state wealth tax. Personally, I find it perplexing that someone would move away from their ideal home just to avoid a tax that doesn’t alter their day-to-day life—seems a bit like “cutting off your nose to spite your face,” as Mahan puts it.
Additionally, I don’t believe that a mass exit of billionaires would necessarily spell the end for Silicon Valley as a hub of tech innovation. For those aiming to become billionaires, there’s still no better place than the Bay Area, with its supportive ecosystem for innovative businesses. Just a few years back, people speculated that Miami would become the next Silicon Valley, but that hasn’t materialized.
