California billionaire wealth tax sparks concerns over potential exodus

California entrepreneur Eric Schiffer, who runs the family office Patriarch and Reputation Management Consultants, said the state’s proposed billionaire wealth tax could trigger a wave of departures by high-net-worth individuals. He told FOX Business that many of his billionaire clients are uneasy about the measure and may choose to relocate if it passes.

"I think the impact of this passing in California is a giant sucking sound of all of these entrepreneurs being sucked out of California because they're just not going to want to stay," Schiffer said.

Proposition 40, slated for the Nov. 3 ballot, would levy a one-time tax equal to 5% of net worth on residents whose wealth exceeds $1 billion as of Jan. 1, 2026, with payments due in 2027 and possible five-year installments at an added cost. Real estate, pensions and retirement accounts would generally be excluded.

Schiffer argued that the tax could affect not only billionaires but also the broader workforce, noting that the departure of entrepreneurs might lead to fewer jobs and reduced investment in the state. He cautioned that the policy could eventually expand to target individuals with fortunes of several hundred million dollars.

The Legislative Analyst’s Office estimates that while the wealth tax could generate tens of billions of dollars over several years, behavioral responses might cut state income-tax revenue by less than $1 billion annually. Governor Gavin Newsom and other Democratic leaders have expressed opposition, whereas the California Democratic Party backs the measure. Republican gubernatorial candidate Steve Hilton also warned of economic strain.

Schiffer said he would consider leaving California if the tax were extended to those with wealth below the billionaire threshold, adding that such changes could alter the perceived contract between entrepreneurs and the state.