A battle is brewing in California over a plan to tax billionaires – with tech titans divided over whether they should pay up, or flee the state.
Under a tax proposal 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.
Several Silicon Valley figures have already threatened to leave California and take their business elsewhere. But Jensen Huang, the CEO of Nvidia whose net worth is nearly $159bn, told Bloomberg Television this week that he is “perfectly fine with it”.
“We chose to live in Silicon Valley,” Huang said. “And whatever taxes I guess they would like to apply, so be it.”
This puts Huang in stark contrast with Google co-founder Larry Page, Palantir co-founder Peter Thiel and Donald Trump’s AI and crypto czar, the venture capitalist David Sacks, all of whom have recently indicated they’re leaving California for tax-friendlier states including Florida and Texas.
The tax proposal 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.
This means Huang would pay roughly $7bn and Page and Thiel would pay one-time amounts of about $13bn and $1.3bn, respectively, based on their current net worth.
“What remains undeniable is the underlying unfairness of the current system,” Suzanne Jimenez, the chief of staff for SEIU-UHW, said in an email. “Regular working people pay higher effective tax rates than the wealthiest Americans … Asking those who have benefited most from the economy to contribute more – particularly to stabilize health care systems under direct threat – is a reasonable step.”
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. It would also need to be signed by California’s governor, Gavin Newsom, who has said he opposes the wealth tax.
“You can’t isolate yourself from the 49 others,” Newsom said when asked about wealth taxes during the New York Times DealBook Summit last month. “We’re in a competitive environment.”
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 likely stay in the state, despite a tax, because California is where the larger industry, innovation and talent pool are located. “A billionaire tax is good for American innovation,” Khanna said, adding that it would spread the wealth to other sectors.
When Thiel indicated he was leaving California because of the proposed tax, Khanna posted to X: “I echo what FDR said with sarcasm of economic royalists when they threatened to leave, ‘I will miss them very much.’”
Some billionaires flee
This is not California’s first billionaire exodus. Elon Musk, the world’s richest person, famously departed for Texas in 2020, which stood to save him millions in taxes. He has also shifted several of his companies’ headquarters 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 “final straw”.
Other tech billionaires have also decamped to Texas, which has no state income tax. Citing a better tax environment, Palantir co-founder Joe Lonsdale moved to Austin in 2020, and Larry Ellison transitioned Oracle’s headquarters there in 2020 (he has since said he’s moving the company to Nashville). Michael Dell, the founder of Dell Technologies, has long lived in Texas.
Sacks made his announcement on 31 December, posting an image of the Texas flag on X and saying: “God bless Texas.” In a separate post the following day, Sacks wrote: “As a response to socialism, Miami will replace NYC as the finance capital and Austin will replace SF as the tech capital.”
Musk, Lonsdale and Dell all responded with hearty welcomes. “No one will fight harder for the independent and free spirit of Texas than people who know [sic] it’s like when that’s taken away,” Musk wrote.
Page has not publicly said where he’s moving, but in December companies associated with the Google co-founder filed documents to incorporate in Florida, according to the New York Times. Thiel, who owns a home in the Hollywood Hills, also seems to have set his sights on Florida. His investment firm, Thiel Capital, announced on 31 December that it had opened an office in Miami. The firm said Thiel has maintained a personal residence in the city since 2020.
On X, tech investors and other billionaires have blasted the proposed wealth tax. Chamath Palihapitiya, a venture capitalist and former Facebook executive, said that without billionaires, California’s “budget deficit will only get bigger”, and Vinod Khosla, another investor, said that under the proposed tax, “California will lose its most important taxpayers and net off much worse”.
Some have indicated they’d work to oust Khanna from Congress. Martin Casado, a partner at the venture capital firm Andreessen Horowitz, wrote that Khanna had “devolved into an obnoxious jerk” 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: “Time to primary him.”
The SEIU’s Jimenez said states like Massachusetts and Washington, which have other forms of wealth taxes, have seen billions of dollars raised to help the state. At the same time, she said, high-income residents have continued to see their portfolios grow. Jimenez added that the union is “heartened” by Huang’s recent comments and is hopeful that more billionaires will follow suit.
As for Huang, he said Nvidia is in Silicon Valley because that’s where the engineers are and he’s not worried about a billionaire tax.
“Not this person,” Huang said. “This person is trying to build the future of AI.”
Representatives for Page, Thiel, Sacks and Newsom did not return requests for comment.
