Will Crypto Billionaires Actually Leave California After New Tax?

A prominent trade union in California, SEIU-United Healthcare Workers West, proposed a 5% assets tax on residents worth over $1 billion, aiming to raise $100 billion to offset healthcare funding cuts. This measure, which would tax unrealized gains and require 850,000 signatures to reach the 2026 ballot, has prompted threats of departure from crypto and tech figures like Jesse Powell of Kraken and Hunter Horsley of Bitwise, who argue the tax constitutes "theft" and that relocating billionaires will reduce state revenue.

However, the article notes that threats of wealthy exodus due to taxes are not new, and historical data from countries like Norway, Sweden, and Denmark suggests that less than 0.01% of the richest households relocate after wealth tax reforms. Furthermore, studies indicate that the ultra-wealthy are often attached to their locations due to family and social networks, with migration rates consistently staying below 1% annually.

While proponents like Palihapitiya claim significant wealth has already fled, critics like David Sacks argue the tax is unnecessary given wasteful spending. Ultimately, the proposal has not yet qualified for a vote, and evidence suggests that even if passed, the potential revenue gain for California might outweigh the risk of a significant departure of its crypto-rich residents.

(Source：Cointelegraph)