Tech Bosses Comment On Looming Tax

Another week, another warning flare from California’s high-dollar class — this time in response to a proposed wealth tax that could drive Silicon Valley’s most influential founders and investors out of the state entirely. The plan, backed by the powerful Service Employees International Union–United Healthcare Workers West, proposes a one-time 5% tax on assets exceeding $1 billion, and if it sounds like something that might spark a tech exodus... well, that’s exactly what it’s doing.

Palmer Luckey, cofounder of defense tech company Anduril and previously the creator of Oculus, didn’t mince words. In a sharply worded post on X, he warned the tax would force founders like him to “sell huge chunks of our companies” just to foot the bill — describing it as a bailout for “fraud, waste and political favors.” His point is clear: the tax may not just target billionaires' lifestyles — it may cannibalize the very equity that keeps innovative companies growing, hiring, and competing globally.

And he’s not the only one. Peter Thiel and Larry Page, two of the most well-known figures in Silicon Valley’s history, are reportedly weighing their options — and considering whether to sever ties with California altogether. That’s not just bluster. These are people with the means, motivation, and precedent for relocation. And if they leave, billions in future tax revenue and investments leave with them.

What makes the measure especially controversial is its retroactive scope. Anyone living in California as of January 1, 2026, would be liable. So even if you leave the next day, your wallet stays behind. If you're worth $20 billion? That’s $1 billion due, stretched out over five years — and that’s assuming no dip in the markets, no asset restructuring, and no liquidity problems.

But here’s where the situation becomes more than a billionaire pity party. This tax wouldn’t just touch the already-rich — it sends a signal to every ambitious founder, investor, and innovator thinking about where to build the future. And that message is: your success will be punished.

Bill Ackman, another heavy-hitting investor, described the proposal as “self-destructive,” warning that Hollywood is already toast and now California is pushing out its most productive citizens, too. That’s not an abstract concern. When capital leaves, jobs follow. When founders relocate, so do their teams. The ripple effects across housing, schools, and services don’t take years to show up — they hit almost immediately.

Ironically, Gov. Gavin Newsom, no stranger to progressive policy, has distanced himself from the wealth tax, calling it something “not to be panicked about” — while also acknowledging the rising national tension over wealth inequality. But the problem isn't about the optics of fairness — it's about the mechanics of innovation. You don’t keep your best minds by retroactively charging them for building successful companies.

Supporters of the measure claim the money would be used to offset cuts to federal healthcare funding, but there’s little evidence the state has managed prior windfalls well. California’s homelessness crisis, deteriorating public schools, and skyrocketing cost of living all cast long shadows over claims of fiscal responsibility.

So now, with the measure still being finalized for the November 2026 ballot, California is holding its breath. But for many in Silicon Valley, that breath may be their last inside state lines. They’ve seen this movie before — and they’re not waiting around for the sequel.