Why Billionaires Are Still Leaving California

When Mark Zuckerberg purchased a Florida mansion in February, many believed he had waited too long. California’s proposed billionaire wealth taxA wealth tax is imposed on an individual’s net wealth, or the market value of their total owned assets minus liabilities. A wealth tax can be narrowly or widely defined, and depending on the definition of wealth, the base for a wealth tax can vary., if approved by voters in November, purports to taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. anyone who was a resident as of January 1st. But Zuckerberg might know something the measure’s proponents do not — or won’t admit.

The California Billionaire Tax Act’s residency provisions are exceptionally vulnerable to legal challenge. Even if the tax passes and survives challenges to its broader constitutionality, billionaires who leave California sometime in 2026 have good reason to believe they can escape some or all of the tax.

The measure would impose a one-time 5 percent tax on the net worth of billionaires who resided in California as of January 1, 2026, based on wealth measured on December 31, 2026. Because the measure can’t be enacted until early November, its residency snapshot predates the tax by ten months.