The fiscal iceberg.
A one-time wealth tax is supposed to be a one-time event. The California Tax Foundation argues it is not. Once a billionaire establishes domicile elsewhere, California permanently loses its jurisdictional claim on their future ordinary income, capital gains, and the consumption taxes that follow. The visible tax above the waterline is the headline. The lost ongoing revenue below it is the iceberg.
This page reconstructs the central argument of Jared Walczak, “Ongoing State Tax Revenue Implications of the 2026 California Billionaire Tax Act” (California Tax Foundation, April 2026), alongside the proponent-side rebuttals it engages with. The numbers and methodology are the authors'. The presentation is ours.
The base is small, and not everyone matters equally.
California has roughly 212 billionaires. Six of them hold half the wealth. Forty-four hold three quarters. Page, Brin, and Zuckerberg alone account for 38 percent.
That is not a stable revenue base. It is a base whose decisions you can name, and whose departures you can list.
How much wealth leaves depends on whom you ask.
Four estimates. Each maps to a specific assumption about how California-resident billionaires respond to a 5 percent levy on their net worth. The bars below are wealth that exits the state base under each scenario, in billions.
The proponents of the Act argue the response is small (10 percent avoidance). Walczak argues it is large (51 to 65 percent). The already-announced number sits between them.
10% avoidance response across all channels (out-migration, reduced investment, planning)
European-derived semi-elasticity, ~51.6% of base lost to out-migration
California-adjusted elasticity reflecting greater interstate mobility
Publicly reported tech billionaire departures as of April 2026
$777 billion is already in motion.
Walczak counts nine publicly reported tech-billionaire departures either announced or in progress, totaling $777 billion in estimated wealth. That is 41 percent of the entire California billionaire base. Quiet departures (lower-profile, no press) are extra.
Wealth figures from the Walczak paper, citing Forbes 2026. Inclusion in this list is not a legal claim about actual relocation status as of any date; it is about reported intent.
- Larry PageReportedly leaving$257B
- Sergey BrinReportedly leaving$237B
- Mark ZuckerbergReportedly leaving$222B
- Peter ThielReportedly leaving$28.4B
- Jan KoumReportedly leaving$17.1B
- Don HankeyReportedly leaving$8.2B
- Travis KalanickReportedly leaving$3.6B
- David SacksReportedly leaving$2.1B
- Andy FangReportedly leaving$1.5B
- Larry Ellison · 2020 · Hawaii
- Drew Houston · 2024 · Austin, TX
- Elon Musk · 2020 · Texas
- Joe Lonsdale · 2020 · Austin, TX
- Alex Karp · 2020 · Colorado
Not all billionaire wealth is the same kind of wealth.
Public-founder equity is mobile and severs ties to California easily; private-operating-business wealth retains 55 percent of its California source income even if the owner moves. The matrix is from the Walczak paper, page 8.
Public Founder Equity | Private Operating Business | Financial Fund Management | Mixed / Diversified | |
|---|---|---|---|---|
Share of base | 65% $1,242.5B · 80 people | 16% $304B · 53 people | 10% $191.5B · 42 people | 8% $161.4B · 37 people |
Mobility | Highest Mobile equity, severs ties easily | Moderate Tied to physical California operations | High Mobile, but relies on California startup ecosystem | High Weak operational ties |
CA-source retention | 5% Virtually zero future liability | 55% Substantial ongoing liability | 35% Retains carried interest | 15% Minimal liability |
Spillover impact | Low ~50 employees per billionaire | Highest ~2,000 employees per billionaire | Moderate ~200 employees per billionaire | Low ~100 employees per billionaire |
Above the waterline, a one-time tax. Below it, a permanent loss.
A one-time wealth extraction
- 5 percent of net worth assessed on a single snapshot date.
- Tax obligation date: January 1, 2026 (residency lock).
- Valuation date: December 31, 2026.
- Heavily reliant on an unproven legal framework and the assumption of static residency.
A permanent structural deficit
- $3.53B to $4.49B in ongoing, annual tax revenue lost forever.
- Driven by permanent out-migration, severing California's jurisdictional claim over future income, capital gains, and consumption taxes.
- Compounds against an income-tax base where the top 1 percent already pays roughly half of all California personal income tax.
- California Tax Foundation · SSRNOngoing State Tax Revenue Implications of the 2026 California Billionaire Tax ActJared Walczak · April 21, 2026
The central source for this projection. 23-page paper estimating $3.53B to $4.49B per year in ongoing revenue loss.
- NBER · Working Paper 34170How Much Tax Do US Billionaires Pay? Evidence from Administrative DataAkcan Balkir, Saez, Yagan, Zucman · August 2025
The empirical foundation cited both by the Act itself (findings (s)) and by Walczak. Source of the 24% all-tax effective rate for billionaires versus 30% for the average California taxpayer.
- Hoover InstitutionThe Net Present Value of the Billionaire Tax ActRauh, Jaros, Kearney, Doran, Cosso · March 2026
Expert report Walczak builds on. Uses 51.6 percent migration response derived from Brülhart et al.
- SSRNResponse to The Net Present Value of the Billionaire Tax ActGalle, Gamage, Saez, Shanske · March 2026
Proponent-side rebuttal. Argues for a 10 percent avoidance response and a one-time framing.
Decide for you which estimate is right.
The proponent estimate (10 percent avoidance) and the Walczak estimate (51 to 65 percent migration response) make very different assumptions about how mobile California billionaires actually are when faced with a 5 percent levy. Both are defensible. We display both. Your job is to read the original papers and form a view. Open the bill at /bill, model your own scenario at /calculator.