California may soon put a groundbreaking wealth tax proposal to voters that would impose a 5 percent annual levy on the net worth of billionaires residing in the state. The initiative, dubbed the "Zucman tax" after French economist Gabriel Zucman who has championed global billionaire taxation, is being pushed by SEIU-UHW, a major healthcare workers union representing 120,000 members.
The proposal has already begun dividing Silicon Valley's wealthiest residents. Jensen Huang, the CEO of Nvidia and currently the world's ninth-richest person with an estimated net worth of $155 billion according to Bloomberg, told the news outlet he hasn't given the potential tax "a single thought." Speaking from the company's Santa Clara headquarters, Huang emphasized his commitment to the region. "We work in Silicon Valley because that's where the talent pool is. Whatever taxes they want to apply, that's perfectly fine with me," he stated.
However, not all tech billionaires share Huang's nonchalance. According to American media reports, Larry Page, co-founder of Google, reportedly transferred a portion of his assets from California to Delaware in December, ahead of the January 1, 2026 cutoff date that would be used to determine asset locations if the tax passes. Similarly, Peter Thiel, co-founder of PayPal and Palantir, has opened a Miami office for his private investment firm, a move also attributed to concerns over the proposed billionaire tax.
If approved by voters in November 2026, the tax would take effect in 2027 but would use January 1, 2026 as the reference date for determining which billionaires are California residents. This timeline has created urgency among the state's ultra-wealthy to potentially relocate their assets before the deadline. Approximately 200 billionaires could be affected by the measure.
The union backing the initiative estimates it could generate approximately $50 billion annually for California, which would represent a massive injection of funds for the state's healthcare and public services. The proposal requires 875,000 valid signatures to qualify for the November 2026 ballot, and organizers are currently working to gather the necessary support.
The California proposal mirrors broader global discussions about taxing extreme wealth. Gabriel Zucman, the UC Berkeley economist after whom the tax is informally named, has been advocating for a coordinated international minimum tax on billionaires to prevent the kind of asset flight already being observed in California. His research has shown that billionaires often pay lower effective tax rates than middle-class workers due to their ability to structure wealth in unrealized capital gains.
The contrasting reactions from Huang and Page highlight the fundamental tension at the heart of the wealth tax debate: while some billionaires view such taxes as a reasonable price for operating in innovation hubs like Silicon Valley, others are already voting with their feet, raising questions about whether the tax could ultimately drive wealth and investment out of the state.
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