Many tech leaders are nervous about new tax laws that could hit them hard, making some think about leaving California for good.
For instance, Larry Page owns 3% of Google, but he controls about 30% of voting power. This means he might owe taxes based on that 30%. This could lead to a huge tax bill. A former SpaceX engineer’s startup could face a tax that wipes out all his shares too.
David Gamage, a law professor, thinks Silicon Valley is overreacting. He says that founders can work with tax lawyers. They may not need to sell their shares right away. If their startup fails, they pay nothing. But if it succeeds, California takes a piece of that success.
However, tax expert Jared Walczak pointed out that finding the value of a startup is tricky. Different appraisers might give different answers. If California disagrees with the value, it can punish both the company and the person who helped find that value.
Now, a health care union wants a one-time 5% tax on people worth over $1 billion. They say the tax will help pay for health care cuts. They hope to raise about $100 billion from around 200 people, starting in 2026.
But not everyone is on board. A group in Silicon Valley called “Save California” has formed. They think the tax is unfair. Meanwhile, some founders are already looking to move, with Larry Page buying properties in Miami recently.
Governor Gavin Newsom is against the tax too. He believes it will not pass.
For now, the health care union is holding firm, saying they are trying to help people in need. They want to get enough signatures to put the tax on the ballot in November.