The confiscation tax proposed in California has gathered enough signatures to place the issue on the November ballot.
The tax initially targets wealthy individuals worth over $1 billion. As it is typical to have this type of wealth held in shares, frequently private shares with limited liquidity, there is a potential for shareholders to be compelled to sell holdings. For founders, this could lead to a loss of control and future opportunity.
Some observers also anticipate that once the policy runs out of people to tax, it will expand into the millionaire class, thus impacting many more California residents.
The proposal has already prompted many wealthy founders and investors to flee the state for more business-friendly jurisdictions, potentially reducing state income tax revenue. The tax may also drive entrepreneurs away from California, which creates much of the wealth and employment in a state known for its tech innovation.
Overall, high taxes and poor governance have already led some former residents to leave. California leads the country in population exodus, with Texas, Florida, and Tennessee being beneficiaries. Each of these states has zero state income taxes assessed on its residents.
Yesterday, California Secretary of State Shirley N. Weber verified 980,000 valid signatures from 1.6 million submitted, thus topping the 875,000 needed for the measure to be placed on the ballot.
The tax proposal is retroactive, so it impacts anyone living in California as of January 1, 2026. The proposal paves the way for future changes that will allow California to take more wealth from its residents.
California’s last budget was set at $350 billion. Independent estimates indicate that California has created a chronic deficit and needs more taxpayer dollars. Meanwhile, government service fraud is rampant, with estimates ranging from $35 billion to up to $180 billion. The state officially admits to at least $20 billion in fraudulent payouts under its unemployment insurance program. Between 2019 and 2024, California paid out $24 billion to eliminate homelessness. This has been an obvious failure.
Prior to January 1, 2026, an estimated $1 trillion in wealth relocated from the state of California.