Chamath Palihapitiya Says People Worth $500 Billion 'Scrambled And Left California' Over Billionaire Tax, Warns That It Will Deepen Budget Deficit
Venture capitalist Chamath Palihapitiya says a proposed California billionaire tax is already driving ultra-wealthy residents out of the state, a move he warns could worsen the budget deficit rather than fix it.
Chamath Says $500 Billion Wealth Exit Over Proposed Billionaire Tax
On Thursday, Palihapitiya took to X that people he knows with a combined net worth of about $500 billion moved to leave California permanently after the state floated a proposed "billionaire tax," which he described as an asset seizure-style levy.
“People I know, with a collective net worth of $500B, scrambled and left California for good yesterday,” he wrote.
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According to Palihapitiya, those individuals chose to exit immediately rather than risk being subject to the tax, arguing the state could ultimately collect less revenue as a result.
He warned that losing high-net-worth residents would only expand California's budget deficit, forcing lawmakers to rely on additional borrowing or broader tax hikes.
"Without these people, the California budget deficit will only get bigger," Palihapitiya wrote, adding that the burden would likely fall on ordinary taxpayers if wealthy residents depart.
People I know, with a collective net worth of $500B, scrambled and left California for good yesterday.
They took no risk because of the proposed asset seizure tax – introduced as a "Billionaire Tax".
Without these people, the California budget deficit will only get bigger.…
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Founder Cash Crunch At Center Of Tax Criticism
Palihapitiya, previously, also criticized the proposal, arguing that the tax unfairly targets unrealized and illiquid wealth, particularly among startup founders.
He said entrepreneurs often earn modest salaries while holding large equity stakes that cannot easily be converted into cash.
In one example, he described a founder with roughly $1.2 billion in paper equity earning a $150,000 salary, who could be forced to come up with tens of millions of dollars in cash under the proposal.
If the company later lost value, Palihapitiya warned, the tax obligation would remain unchanged, potentially leaving the founder insolvent.
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