California's 5% Wealth Levy Is on the Ballot, and the Clock Already Ran Out

California's proposed one-time 5% tax on residents with assets above $1 billion stopped being a hypothetical on June 25, when it was certified for the November 2026 ballot after collecting enough valid signatures ^[1][2]. Because the measure would apply retroactively to all California residents as of January 1, the question for anyone in range is no longer how to structure a bill but where to be domiciled, and on that timeline the answer was due before the campaign started ^[3][8].

The threat is already on paper. In a letter to Governor Gavin Newsom obtained by Business Insider, attorney Alex Spiro wrote that his clients would "permanently relocate" if the tax becomes law ^[4]. Spiro has previously represented billionaires and celebrities ^[5]. The measure was proposed by the Service Employees International Union-United Healthcare Workers West and is aimed at a projected multibillion-dollar state budget deficit ^[6]. Newsom has said he opposes a one-time state wealth tax and favors a nationwide billionaire tax instead ^[7].

The exposure is large enough to justify the letterhead. Nvidia's Jensen Huang was ranked ninth-richest in the world with a net worth of $155 billion as of January 6 ^[15]. A flat 5% applied to that figure is roughly $7.75 billion, though the source material does not specify how the taxable base would be measured ^[24]. Huang told Bloomberg TV he had not thought about the tax once, that he chose to live in Silicon Valley and was "perfectly fine" with whatever taxes were applied, and that Nvidia sits there because that is where the talent pool is ^[16][17].

Others are less relaxed, and the split is instructive. Bill Ackman wrote on X that he opposes wealth taxes because they "effectively represent an expropriation of private property" with "unintended and negative consequences," while arguing for a fairer system in which someone cannot borrow against company stock, live like a billionaire, and pay no personal income tax ^[9][10]. His read on the state is a spending problem, not a revenue one ^[11]. Ben Horowitz, who moved from California to Las Vegas in 2021, called the measure the "best strategy I've seen" for breaking the Silicon Valley network effect and pointed to Norwegian founders leaving over an unrealized capital gains tax ^[12][13][14].

Representative Ro Khanna, whose district covers much of Silicon Valley, called the proposal "good for American innovation," and after a sarcastic December 26 farewell post to would-be leavers drew thousands of comments, he defended it at length on X ^[18][20]. His argument was that Huang "wasn't thinking I won't start this company because I may have to one day pay a 1% tax on my billions" ^[19], and that wide wealth gaps stifle innovation through political dysfunction and social unrest ^[21]. The rate on the ballot is five times the one in that sentence ^[23]. A spokesperson, Sarah Drory, said Khanna has always supported a modest wealth tax on billionaires and has advocated workarounds for founders whose companies are unprofitable and whose stock is illiquid ^[22]; the material at hand does not say whether the certified measure contains any.

Watch whether Spiro's letter is followed by other counsel filing the same notice, since a coordinated set of residency changes is the only variable that turns rhetoric into a fiscal estimate. Watch also how the campaign handles the 1%-versus-5% gap, and whether the illiquid-founder problem gets drafted into anything before November.