California, long a symbol of aspiration and opportunity, is facing a slew of challenges under the leadership of Governor Gavin Newsom and a Democrat-dominated legislature. With a striking majority of 90 Democrats to 30 Republicans, the state government has been grappling with issues such as high taxes, rising crime rates, homelessness, illegal immigration, and a soaring cost of living. These challenges have shifted the perception of California from a coveted destination to a source of national scrutiny.

The state’s latest controversial idea is a proposal to impose additional taxes on billionaires, who already contribute significantly to California’s revenue. Despite varying opinions on the ultra-wealthy, their financial contributions are crucial; the top one percent of earners in California account for over 39% of the state’s income tax revenue.

At the center of this debate is the proposed 2026 California Billionaire Tax, which aims to impose a one-time five percent levy on individuals with a net worth exceeding $1 billion. Although currently just a proposal without legal backing, it has already stirred concern among high-net-worth individuals. Many of them are contemplating leaving the state, wary of the financial implications and recalling similar situations in the past.

Entrepreneur Chamath Palihapitiya highlighted this trend on the social media platform X, noting that capital is fleeing California at an unprecedented rate. His comments reflect the growing apprehension among the state’s wealthiest residents, who are reevaluating their ties to the Golden State.

Entrepreneur Chamath Palihapitiya wrote on X Sunday that the money is leaving the state at a record pace:

Unfortunate update as of today:

More calls from friends. The total wealth that has left California is now $1T.

We had $2T of billionaire wealth just a few weeks ago. Now, 50% of that wealth has left – taking their income tax revenue, sales tax revenue, real estate tax revenue… https://t.co/IQZFieRgL7

— Chamath Palihapitiya (@chamath) January 11, 2026

His tweet continues:

We had $2T of billionaire wealth just a few weeks ago. Now, 50% of that wealth has left – taking their income tax revenue, sales tax revenue, real estate tax revenue and all their staffs (and their salaries and income taxes) with them. 

In other words, by starting this ill conceived attempt at an asset tax, the California budget deficit will explode. And we still don’t know if the tax will even make the ballot. 

California billionaires were reliable tax payers – 13.3% every year. They were the sheep you could shear forever.  Now California will lose this revenue source FOREVER. 

Unless this ballot initiative is pulled, we will not stop the billionaire exodus. With no rich people left in California, the middle class will have to foot the bill.

As RedState’s Becca Lower reported, billionaires aren’t the only ones fleeing for greener pastures:

MONEY FLIGHT: The Numbers Don’t Lie: Once Again, Blue States Predictably Top Annual List of Where People Are Leaving

California: Nice Place to Visit, but You Wouldn’t Want to Be Rich There

Meanwhile, the Google billionaire bros are reportedly searching for a new home. Get it? Searching.

Larry Page and Sergey Brin, the billionaire co-founders of Google, are scaling back their ties to California as a proposed ballot initiative threatens to impose a one-time wealth tax on the state’s richest residents, according to The New York Times.

Critics like LinkedIn co-founder Reid Hoffman called the wealth tax a “horrendous idea” and counterproductive.

“Poorly designed taxes incentivize avoidance, capital flight, and distortions that ultimately raise less revenue,” he said.

Their combined net worth is somewhere around $518 billion, so that’s not pocket change.

NEWS:

Google co-founder Sergey Brin is cutting ties with California.

In the 10 days before Christmas, an entity connected to Brin terminated or moved 15 California LLCs that oversee some of his business interests or investments out of the state.

With @RMac18 + @hknightsf. pic.twitter.com/BcwpJcGCfg

— Teddy Schleifer (@teddyschleifer) January 9, 2026

MORE: Atlas Shrugging? California Tech Moguls Threatening to Leave Over Wealth Tax

The measure remains under consideration for the November ballot — but billionaires didn’t get rich by being stupid, and it would seem many of them are getting out while the getting is good. Newsom, meanwhile, has actually criticized the tax, but he’s helped create the environment of taxing everyone to the hilt while simultaneously running the state into the ground, so he can’t really distance himself from this one. This is your ship, captain, and you’ve charted us into disastrous waters; you own this one just as you do so many other failures.

Even if the initiative fails, plenty of damage has already been done. Way to go, Sacramento dunderheads.

Editor’s Note: California is the poster child for everything that is wrong with the Democrat Party and the “progressive” movement.

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