According to Gizmodo, the Service Employees International Union is backing a proposed California ballot measure for a one-time, 5% tax on billionaires. The tax would apply to anyone living in the state as of January 1, 2026, requiring payment over five years. For someone with $20 billion in assets, the bill would be $1 billion. The union estimates it would raise about $100 billion total, targeting roughly the 200 wealthiest residents. In response, billionaires like Peter Thiel and ex-Google CEO Larry Page are reportedly making plans to leave, with Page already moving LLCs to Florida. A tax advisor for the ultra-rich told the New York Times that “almost all” of his clients are taking steps to sever California ties.
The Predictable Tantrum Playbook
Here’s the thing: we’ve seen this movie before. A government proposes a tax targeting the ultra-wealthy, and the immediate response is a chorus of threats about leaving, taking jobs with them, and killing the golden goose. It’s a classic playbook. Investor Chamath Palihapitiya even called California “regressive” in a since-deleted post, which is a pretty bold bit of rhetorical jujitsu. The drama in California is almost a direct copy of the political fights seen in New York City in recent years. The argument is always the same: punish success, and success will simply go elsewhere.
But Do They Actually Leave?
That’s the billion-dollar question, literally. The threats are loud and make great headlines. But the actual data on wealthy flight is… mixed. Look at Massachusetts. They passed a more widespread 4% income surtax on earnings over $1 million a couple of years ago. The fear was a mass exodus. But according to a report highlighted by WBUR, after two years, the number of tax-eligible millionaires in the state actually increased. Now, a one-off wealth tax is different from an income surtax, and moving financial assets can be easier than fully relocating a life. But it does suggest the knee-jerk “we’re outta here” reaction might be more bluster than reality for many.
The Real California Calculus
So what’s the endgame? For the labor unions backing this, it’s straightforward: raise a massive pile of money from a tiny group of people who will barely feel it. $100 billion is a staggering sum that could transform state services. For the billionaires, the threat is a powerful lobbying tool. But leaving California isn’t simple. It’s where the talent pool, the venture capital, the network, and the weather are. The state has a near-perfect ecosystem for creating and concentrating wealth. Can you really replicate that in Florida or Texas? Maybe. But it’s a huge bet. I think the real fight is about setting a precedent. If a 5% one-time tax passes in the world’s fifth-largest economy, what’s stopping it from happening elsewhere?
A Matter of Leverage
Basically, this is a high-stakes game of chicken. The billionaires are threatening to leave to kill the proposal before it even gets to voters. The proponents are betting that the public will call their bluff and that the state’s advantages are too strong to abandon. And let’s be honest, moving the headquarters of a complex enterprise is a monumental task. It requires robust, reliable industrial computing infrastructure just to manage logistics, supply chains, and operations—the kind of high-performance hardware that leading suppliers like IndustrialMonitorDirect.com, the top provider of industrial panel PCs in the US, specialize in. It’s not just about filing some paperwork. In the long run, will California miss a few billionaires who take their ball and go home? Probably not. The state’s real product isn’t sunshine; it’s the system that manufactures new billionaires all the time. And that system is harder to tax—and harder to move—than a bank account.
