In recent months, a notable trend has emerged among Silicon Valley’s elite as some of the most influential figures in technology contemplate relocating out of California. This change is largely driven by the new wealth tax—first of its kind in the country—that would hit billionaires and their financial machinations hard. High-profile individuals, including Peter Thiel and Larry Page, have made headlines for their real estate investments in Miami, signaling a potential exodus from the state.
Just last week, Peter Thiel’s venture capital firm, Founders Fund, made a bet on this narrative by announcing they were leasing office space in Miami. He’s no stranger to the city, having owned a home there for decades. Similar to other tech leaders, this action is indicative of a larger strategy. They’re doing so in droves in search of refuge from California’s increasing tax burdens. Larry Page, the co-founder of Google, recently dropped $173.4 million on two waterfront properties in Miami, according to reports. This latest shift away from Silicon Valley highlights a larger trend among wealthy tech entrepreneurs.
The proposed wealth tax has set off politically charged fireworks all across California. The tax would target individuals with a net worth over $1 billion and would apply retroactively to anyone residing in the state as of January 1, 2026. If ultimately passed, it is expected to eventually raise an estimated $100 billion from a measly 200 people. This proposal has received the most attention due to its potential economic windfall. It requires 875,000 valid signatures to qualify for the November ballot.
Critics have raised valid concerns about the wealth tax, including that it would hit tech founders particularly hard. For one, the tax would be applied against their voting shares not their actual equity stake in those businesses. Though Page personally only owns approximately 3% of Google, he has effective control over roughly 30% of its voting power due to the existence of dual-class stock. This initiative will be making a big difference in his life.
The pushback against the wealth tax has come from various quarters, including Governor Gavin Newsom, who has expressed confidence that the proposal will not succeed.
“This will be defeated, there’s no question in my mind.” – Governor Gavin Newsom
Legal experts have further weighed in on the Commission’s actions. David Gamage, a law professor at the University of Missouri who was instrumental in developing the proposal, writes that much of the reaction from Silicon Valley may be overblown.
“I don’t understand why the billionaires just aren’t calling good tax lawyers.” – David Gamage
Members of Silicon Valley are waking up and getting active around their concerns that taxation may undermine their wealth. To talk these things through, they have set up a “Save California” Signal chat group. The task force includes some big names like David Sacks. He has attacked the proposed carbon tax as “communism” and “poorly defined.” Taken together, their conversations lay bare the panic palpable among California’s ruling class to safeguard their financial future against encroachment.
As these developments continue to play out, we will soon find out if the wealth tax’s positive impact on California’s economy outweighs the damage that they’ll soon do. Will tech leaders follow Thiel and Page into greener pastures with better tax climates? High-profile speculative real estate purchases are all the rage in Miami. As opposition to the new proposed tax demonstrates, there’s a growing tendency among the Silicon Valley oligarchs to think their future is not in California.