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A battle is brewing in California<\/a> over a plan to tax billionaires \u2013 with tech titans divided over whether they should pay up, or flee the state.<\/p>\n Under a tax proposal<\/a> that could be put to voters this November, any California resident worth more than $1bn would have to pay a one-off, 5% tax on their assets to help cover education, food assistance and healthcare programs in the state.<\/p>\n Several Silicon Valley figures have already threatened <\/strong>to leave California and take their business elsewhere. But Jensen Huang, the CEO of Nvidia whose net worth is nearly $159bn, told Bloomberg Television<\/a> this week that he is \u201cperfectly fine with it\u201d.<\/p>\n \u201cWe chose to live in Silicon Valley,\u201d Huang said. \u201cAnd whatever taxes I guess they would like to apply, so be it.\u201d<\/p>\n This puts Huang in stark contrast with the Google co-founders Larry Page and Sergey Brin, Palantir co-founder Peter Thiel<\/a> and Donald Trump\u2019s AI and crypto czar, the venture capitalist David Sacks, all of whom have recently indicated they are leaving California for tax-friendlier states including Florida and Texas.<\/p>\n The tax proposal<\/a> is being led by the labor union Service Employees International Union-United Healthcare Workers West. If passed, the tax would retroactively apply to residents as of 1 January, and billionaires would have five years to pay it.<\/p>\n This means Huang would pay roughly $7bn and Page and Brin <\/strong>would pay one-time amounts of about $13bn and $12bn, respectively, based on their current net worth of $264bn and $243bn. Thiel would pay $1.3bn, based on his current net worth of $26bn.<\/p>\n \u201cWhat remains undeniable is the underlying unfairness of the current system,\u201d Suzanne Jimenez, the chief of staff for SEIU-UHW, said in an email. \u201cRegular working people pay higher effective tax rates than the wealthiest Americans \u2026 Asking those who have benefited most from the economy to contribute more \u2013 particularly to stabilize health care systems under direct threat \u2013 is a reasonable step.\u201d<\/p>\n The proposal is still in the beginning phases. Under California law, it needs to collect 874,641 signatures to qualify for the state ballot in November.<\/p>\n California\u2019s governor, Gavin Newsom, has said he opposes the wealth tax and will \u201cfight\u201d it if it proceeds. His spokesperson told the Guardian that Newsom has consistently opposed state-level wealth taxes and the governor believes that \u201cif implemented at a state-only level they drive a race to the bottom\u201d.<\/p>\n During the New York Times DealBook Summit<\/a> last month, Newsom said: \u201cYou can\u2019t isolate yourself from the 49 others. We\u2019re in a competitive environment.\u201d<\/p>\n This puts Newsom at odds with Ro Khanna, the California representative who represents Silicon Valley and who has championed the idea of a wealth tax. Khanna says tech billionaires will probably stay in the state, despite a tax, because California is where the larger industry, innovation and talent pool are located. \u201cA billionaire tax is good for American innovation,\u201d Khanna said, adding that it would spread the wealth to other sectors.<\/p>\n When Thiel indicated he was leaving California because of the proposed tax, Khanna posted to X<\/a>: \u201cI echo what FDR said with sarcasm of economic royalists when they threatened to leave, \u2018I will miss them very much.\u2019\u201d<\/p>\n This is not California\u2019s first billionaire exodus. Elon Musk, the world\u2019s richest person, memorably departed for Texas in 2020, which stood to save him millions in taxes<\/a>. He has also shifted several of his companies\u2019 headquarters<\/a> there. Most recently, in 2024, Musk announced he was moving SpaceX to Texas because of a California law that aimed to protect transgender children in schools. He called the law<\/a> a \u201cfinal straw\u201d.<\/p>\n Other tech billionaires have also decamped to Texas, which has no state income tax. Citing a better tax environment, the Palantir co-founder Joe Lonsdale moved to Austin<\/a> in 2020, and Larry Ellison transitioned Oracle\u2019s headquarters there in 2020 (he has since said he\u2019s moving the company to Nashville). Michael Dell, the founder of Dell Technologies, has long lived in Texas.<\/p>\n Sacks made his announcement on 31 December, posting an image of the Texas flag on X and saying: \u201cGod bless Texas.\u201d In a separate post the following day, Sacks wrote: \u201cAs a response to socialism, Miami will replace NYC as the finance capital and Austin will replace SF as the tech capital.\u201d<\/p>\n Musk, Lonsdale and Dell all responded with hearty welcomes. \u201cNo one will fight harder for the independent and free spirit of Texas than people who know [sic] it\u2019s like when that\u2019s taken away,\u201d Musk wrote<\/a>.<\/p>\n Page has not publicly said where he\u2019s moving, but in December companies associated with the Google co-founder filed documents to incorporate in Florida, according to the New York Times<\/a>. He purchased two homes in Miami for $173.4m in December and January, the Wall Street Journal<\/a> reported. Thiel, who owns a home in the Hollywood Hills, also seems to have set his sights on Florida. His investment firm, Thiel Capital, announced<\/a> on 31 December that it had opened an office in Miami. The firm said Thiel had maintained a personal residence in the city since 2020.<\/p>\n Brin also hasn\u2019t publicly announced he\u2019s leaving California, but in mid-December an entity connected to the billionaire either ended or moved more than a dozen of its limited liability companies out of the state, according to the New York Times<\/a>. Several of those companies were moved to Nevada.<\/p>\n On X, tech investors and other billionaires have blasted the proposed wealth tax. Chamath Palihapitiya, a venture capitalist and former Facebook executive, said<\/a> that without billionaires, California\u2019s \u201cbudget deficit will only get bigger\u201d, and Vinod Khosla, another investor, said<\/a> that under the proposed tax, \u201cCalifornia will lose its most important taxpayers and net off much worse\u201d.<\/p>\n Some have indicated they would work to oust Khanna from Congress. Martin Casado, a partner at the venture capital firm Andreessen Horowitz, wrote<\/a> that Khanna had \u201cdevolved into an obnoxious jerk\u201d and that his support of the wealth tax had alienated him from moderates. In response, Garry Tan, the CEO of the startup accelerator Y Combinator, wrote<\/a>: \u201cTime to primary him.\u201d<\/p>\n The SEIU\u2019s Jimenez said states like Massachusetts and Washington, which have other forms of wealth taxes, had seen billions of dollars raised to help the state. At the same time, she said, high-income residents had continued to see their portfolios grow<\/a>. Jimenez added that the union was \u201cheartened\u201d by Huang\u2019s recent comments and is hopeful that more billionaires will follow suit.<\/p>\nSome billionaires flee<\/h2>\n