What California gets when a billionaire stays.
What it loses when they go.
The Walczak / CalTax projection counts dollars (the iceberg below the waterline). The proponent rebuttal counts revenue (the one-time receipt above it). Neither captures the full economic contribution that a billionaire and the companies they build create while resident in California: human capital, financial capital, payroll tax, sales tax, supplier ecosystem, and the follow-on companies their wealth seeds. This page tries to quantify that for one founder. Then it shows what changed when he moved.
Direct employees on California payroll. Indirect jobs from suppliers, contractors, and on-campus services. Employee state income tax remits.
Capital deployed into California facilities, R&D, and supplier networks. Property and improvements that anchor a tax base.
Founder personal income tax on stock realizations as a CA resident. Corporate franchise tax. Sales and use tax on operating purchases. Payroll-tied withholdings.
The follow-on companies that get founded with proceeds from the first one. The graph of CA founders that came out of CA founders is the most-studied economic-spillover dynamic in the literature.
Elon Musk and the four-company stack.
Musk left California for Texas in December 2020. By 2024, all four of his California-built operating companies had relocated their headquarters out of state. California still has the original factories. It has lost the corporate domicile, the future expansion, and most importantly, the founder's personal income-tax surface on future stock realizations.
Read the row carefully: California direct jobs in Musk-companies are higher today than at the moment of the move. The employees stayed and grew. What did not stay was the founder, the headquarters, and the marginal capital deployment for new factories. Texas direct jobs in the same four companies grew from a few hundred (the McGregor engine test site) to roughly forty thousand.
Tesla
Public · TSLA · founded 2003- Fremont assembly factory (~10M sq ft, the original NUMMI plant Tesla bought in 2010)
- Palo Alto / Sunnyvale engineering and design offices
- Lathrop battery and trim facilities
- Gigafactory Texas, Austin (Cybertruck and Model Y assembly)
- Headquarters relocated 2022
- · Tesla 2023 Annual Report (Form 10-K)
- · Tesla 2021 Annual Meeting announcement of HQ relocation to Austin (Oct 7 2021)
- · City of Austin and Travis County economic-development announcements
SpaceX
Private · founded 2002- Hawthorne, CA: Falcon 9, Falcon Heavy, Dragon production
- Vandenberg Space Force Base launch operations
- Major workforce remains in Hawthorne despite HQ move
- Starbase / Boca Chica: Starship development and launch
- McGregor: engine testing facility (since 2003)
- Austin: Starlink production
- · SpaceX HQ relocation filing with TX Secretary of State, July 2024
- · Hawthorne employer surveys (LA County EDC)
- · WSJ and Bloomberg private-valuation coverage
The Boring Company
Private · founded 2016- Hawthorne test tunnel was built 2017–2018 and demonstrated 2018; physical assets remain but active operations moved
- Bastrop campus, Pflugerville office
- Vegas Loop project remains the company's primary deployed product, but engineering moved out of CA
- · Bastrop County and TX Comptroller filings
- · Wired and Bloomberg coverage of Hawthorne to Bastrop relocation
Neuralink
Private · founded 2016- Fremont, CA office remains for some R&D
- Austin HQ and primary R&D
- · Neuralink HQ relocation announcements
- · TX Comptroller filings
- · Bloomberg / Reuters private-valuation coverage
xAI
Private · founded 2023- Some Bay Area engineering operations
- X / xAI Bastrop campus
- · WSJ, Bloomberg coverage of xAI funding rounds
What changed in California, what changed in Texas.
- Tesla HQ in Palo Alto, IPO'd from CA in 2010, paid CA tax on founder's stock realizations
- SpaceX HQ in Hawthorne, ~6,000 CA employees, primary US launch site
- The Boring Company HQ at SpaceX, all engineering in Hawthorne
- Neuralink HQ in Fremont, all R&D in CA
- Musk personal residence in Bel Air, CA tax-resident
- All future Tesla stock option realizations sourced to CA at top marginal rate of 13.3%
- Tesla HQ in Austin, TX. Fremont continues to operate as factory.
- SpaceX HQ in Starbase, TX. Hawthorne continues for Falcon 9 and Dragon production.
- The Boring Company HQ in Bastrop County, TX
- Neuralink HQ in Austin, TX
- Musk tax-resident in Texas, no state income tax
- Future stock realizations largely sourced to TX. CA loses the marginal income-tax claim on the founder.
- X (the rebranded Twitter) and xAI both headquartered in TX, not CA
The taxes that move with the founder, and the ones that stay.
Musk's California-source personal income tax peaked in years he exercised Tesla stock options as a CA resident. Public IRS-disclosed numbers from ProPublica (2021) showed reported taxable income spiking in 2018 (~$1.34M) and 2019 (~$0). Capital gains at California 13.3% top marginal would have been the dominant component when realized.
California-source income tax on Musk now limited to CA-based equity awards and CA-source business income. Federal capital gains realized as a TX resident largely escape California tax.
Tesla, SpaceX, Neuralink, and Boring still operate in California and continue to remit California sales, payroll, and franchise taxes on their CA operations. The HQ move shifts the corporate domicile but does not eliminate California-source receipts.
However, future expansion increments and new facilities tied to these companies have largely landed in Texas, Nevada, and Tennessee since 2021.
The new companies a departed founder builds, and where they get built.
The Walczak paper's Ongoing-Loss number depends heavily on this question: when a billionaire who departs starts a new company, where does that company get its corporate domicile, jobs, and tax surface? For the Musk graph since 2020, the answer is mostly Texas, with some Tennessee compute spend (xAI) and some Nevada incorporation.
- Elon MuskNow: Texas
- X (the rebranded Twitter, headquartered in Bastrop, TX)
- xAI (compute deployed in Memphis, TN)
- Larry EllisonNow: Hawaii / Nashville-area
- Oracle HQ moved to Austin, TX in 2020. New Oracle HQ in Nashville announced 2024.
- Lanai investments and life-sciences buildouts in Hawaii.
Before the pandemic, during, and after.
The graph below maps the major California corporate headquarters relocations across three phases. Direct HQ-relocated jobs across all three phases total roughly 52,800. Most of these companies retain operating presence in California (factories, regional offices, manufacturing). The figures below represent jobs that moved with the corporate domicile, not California operations totally vacated.
Slow but steady. Mostly traditional sectors (oil and gas, food, engineering) relocating to lower-cost states. Pre-COVID baseline outflow.
- 2014Toyota Motor North AmericaSubsidiary of TM (NYSE)Torrance, CA → Plano, TXAutomotive HQ~4,000 jobs
- 2014Occidental PetroleumOXY (NYSE)Los Angeles, CA → Houston, TXOil and gas~1,800 jobs
- 2016Jacobs EngineeringJ (NYSE)Pasadena, CA → Dallas, TXEngineering services~1,200 jobs
- 2016Jamba JuiceAcquired privateEmeryville, CA → Frisco, TXFood and beverage HQ~100 jobs
- 2017Nestlé USASubsidiary of NESN (SIX)Glendale, CA → Arlington, VAConsumer goods HQ~1,200 jobs
- 2018McKessonMCK (NYSE)San Francisco, CA → Las Colinas, TXHealthcare distribution HQ~600 jobs
- 2019Charles SchwabSCHW (NYSE)San Francisco, CA → Westlake, TXFinancial services HQ~1,200 jobs
The acceleration. Tech, finance, and capital firms relocate corporate domicile in record numbers. Tesla and Oracle in 2020-2021 are the marquee moves. Roughly 350+ HQ relocations were tracked by Hoover Institution and Stanford during this window.
- 2020Hewlett Packard EnterpriseHPE (NYSE)San Jose, CA → Spring, TXEnterprise tech HQ~1,200 jobs
- 2020OracleORCL (NYSE)Redwood Shores, CA → Austin, TX (later Nashville, TN, in 2024)Enterprise software HQ~8,000 jobs
- 2020Palantir TechnologiesPLTR (NASDAQ)Palo Alto, CA → Denver, COData analytics HQ~600 jobs
- 20208VC (Joe Lonsdale)PrivateSan Francisco, CA → Austin, TXVenture capital~50 jobs
- 2020CBRE GroupCBRE (NYSE)Los Angeles, CA → Dallas, TXCommercial real estate HQ~700 jobs
- 2020AECOMACM (NYSE)Los Angeles, CA → Dallas, TXInfrastructure engineering HQ~600 jobs
- 2021DXC TechnologyDXC (NYSE)Tysons / El Segundo, CA → Ashburn, VAIT services HQ~400 jobs
- 2021TeslaTSLA (NASDAQ)Palo Alto, CA → Austin, TXAutomotive / energy~22,000 jobs
- 2021Digital RealtyDLR (NYSE)San Francisco, CA → Austin, TXData center REIT~200 jobs
- 2022Stone Brewing (HQ functions)Acquired privateEscondido, CA → Richmond, VA (operations split)Brewing~250 jobs
Slower pace but more strategically loaded. Musk's remaining companies finish relocating. Chevron leaves after 145 years. The arrival of the CABTA proposal in late 2025 accelerated the calendar for several Musk-era moves.
- 2023NeuralinkPrivateFremont, CA → Austin, TXNeural interface R&D~200 jobs
- 2024X (formerly Twitter)Private (post-acquisition)San Francisco, CA → Bastrop, TXSocial platform~1,500 jobs
- 2024SpaceXPrivateHawthorne, CA → Starbase, TXAerospace~6,000 jobs
- 2024ChevronCVX (NYSE)San Ramon, CA → Houston, TXOil and gas~2,000 jobs
- 2024Oracle (second move)ORCL (NYSE)Austin, TX → Nashville, TNEnterprise software HQn/a
Compiled from SEC 8-K filings, company press releases, state Secretary-of-State filings, and contemporaneous reporting. Employee figures are at-time-of-move estimates. Tax-loss figures are illustrative, derived from public payroll size assumptions and CA top-bracket marginal rates.
Six years of net AGI outflow.
IRS Statistics of Income tax-stats migration data tracks every state-to-state move of every filer, by AGI bracket, year over year. California has run a net loss since 2018. The pandemic period (2020-2021) saw the largest single-year outflows in the dataset's history. Cumulative net AGI loss 2018-2023 is over $109 billion.
Net interstate AGI loss for California, IRS Statistics of Income SOI Tax Stats Migration Data. 2021 was the peak of the Bay Area pandemic outflow. Cumulative 2018–2023 net loss exceeds $109B in AGI.
The migration is not uniform. Per-capita departure rates climb steeply with income. The headline billionaire-tax debate is one slice of a broader pattern: the higher your AGI, the more likely you are leaving California, and the bigger your dollar footprint when you go.
- Under $50K AGINet inbound
Modest net inflow as lower-cost relocations to CA continue, especially for service-sector workers.
- $50K to $100K AGINet outbound, modest
Working professionals leaving for lower cost of living; the largest demographic absolute outflow.
- $100K to $200K AGINet outbound, significant
Mid-career professionals and small-business owners; largest dollar-weighted outflow group.
- $200K to $500K AGINet outbound, large
Senior professionals and specialists; pandemic-era spike in remote-work-eligible departures.
- $500K to $1M AGINet outbound, very large per capita
Tech, finance, and medicine. Per-capita departure rate roughly 2x the population average.
- $1M+ AGINet outbound, severe per capita
Founder, executive, and capital-gains class. The Walczak paper focuses here. CA top 1% pays roughly half of state personal income tax.
Direction inferred from IRS SOI migration tables and FTB top-bracket filings. Magnitudes vary year to year. The pattern of progressively larger per-capita outflow at higher income brackets is consistent across 2020–2023 data.
California's top ten destinations, 2020-2023.
IRS migration data, weighted average across the four pandemic and post-pandemic years. Texas alone accounts for roughly a quarter of California's outbound AGI. The top three (Texas, Florida, Arizona) account for half. None of the top ten has a state income tax above 7%; six have no state income tax at all.
- TexasAustin, Houston, Dallas-Fort Worth$12B25%
- FloridaMiami, Tampa, Naples$7.9B16%
- ArizonaPhoenix-Scottsdale$4.5B9%
- NevadaLas Vegas, Reno, Lake Tahoe$3.8B8%
- TennesseeNashville$2.7B6%
- WashingtonSeattle metro$2.4B5%
- IdahoBoise$2.2B5%
- ColoradoDenver-Boulder$2.1B4%
- OregonPortland$1.7B4%
- GeorgiaAtlanta$1.5B3%
IRS SOI Tax Stats migration data, weighted average across 2020-2023. Shares are of California's total outbound AGI to other states. Texas alone accounts for roughly a quarter.
Billionaires, millionaires, everyone else.
California has 39 million people. About one in 33 households holds at least $1 million in net worth. About one in 184,000 residents is a billionaire. The Act targets the smallest of these populations and aims to fund services for the largest.
The 2026 Billionaire Tax Act applies to roughly 0.0005% of the population. That base produces, by the proponent estimate, the funding for Medi-Cal and K-14 carve-outs covering the other 99.9995%.
California's top 1% of taxpayers pays roughly 49% of all state personal income tax. The state's revenue base is the most concentrated of any large state. That concentration is the proponent argument and the opposition argument at the same time.
SpaceX, The Boring Company, Neuralink, and xAI do not publish employee counts or revenue. Numbers shown are reported ranges from press accounts and city economic-development releases. Treat as directional, not audited.
What California would look like without these companies, or with them but without the wealth tax, cannot be measured. Only the actual path of jobs, revenue, and HQ moves can.
Founders relocate for many reasons: tax, regulation, lifestyle, energy, real estate, politics. Attributing the move to any single factor is a judgment call, not a measurement. Texas has been pulling tech founders since well before the wealth-tax proposal.
Tesla still has Fremont. SpaceX still has Hawthorne. Neuralink still has Fremont. The original factories and engineering centers remain. The HQ move shifts corporate domicile but does not, by itself, eliminate California operations.
Quantify what the projection page narrates.
The Walczak iceberg argument compresses to: future income tax gone with the founder. This page expands it. The answer to “is California losing more than it gains?” depends on the assumption set. Read /scenarios to model the macro path, then come back here for the worked micro-example.