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No more California dreaming
California’s wealthy individuals find themselves at a critical juncture.
One of the most significant business developments at the start of the year is the proposed wealth tax in California. Individuals with a net worth exceeding $1 billion would be subject to a one-time 5% tax on their assets if the proposal is approved.
The plan, designed to tackle a predicted multibillion-dollar state budget shortfall, has caused much complaint among California’s upper class.
As Business Insider was the first to report, several individuals have already acted, including Google co-founders Larry Page and Sergey Brin.
Page moved his confidential family office out of California.In late December, it was incorporated in Delaware, as reported exclusively by my colleague Hugh Langley. Page has also recently established other entities in Delaware, including one used to support influenza research and another related to his flying car initiatives. He provides principal office addresses for these entities outside of California.
Separately, A party associated with both Brin and Page left California.by the end of 2025.
The timing of these actions is vital. If the ballot initiative passes in November, it will be applied retroactively for those residing in California as of January 1, 2026. Therefore, the urgency to transfer assets before the year’s end.
Brin and Page are among the wealthiest individuals globally, possessing a total net worth exceeding half a trillion dollars, as reported by the Bloomberg Billionaires Index.
Nvidia’s CEO, Jensen Huang, made an impacta very different toneHe stated he is “completely fine” with the tax and showed no sign of intending to depart from Silicon Valley, regardless of the cost.
Others are more pessimistic. LinkedIn co-founder Reid Hoffmancalled the proposal “terrible” in terms of innovation, cautioning that poorly structured wealth taxes fail to generate consistent revenue — they cause funds and skilled individuals to move elsewhere.
Alex Spiro, the renowned attorney who advises multiple billionaires, wrote a letter to Gov. Gavin Newsom last month cautioning thatThe tax would cause capital and innovation to leave California..
Earlier this month, White House AI official David Sacks forecastedAustin is set to surpass San Francisco as the leading technology hub in the United States.His social media post spread widely within tech and venture communities, receiving praise from those who oppose coastal norms and facing strong criticism from traditionalists.
Where do you stand on the proposed tax on billionaires in California? Let me know your thoughts atsrussolillo@.
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