Two of Silicon Valley's most prominent figures, venture capitalist Peter Thiel and Google co-founder Larry Page, are reportedly making urgent plans to leave California. Their potential departure is driven by fears of a proposed one-time wealth tax that could cost them billions of dollars.
The Billion-Dollar Tax That Sparked an Exit
According to sources cited by the New York Times, both tech moguls are exploring exit strategies before the New Year's Eve deadline. The reason is a ballot measure pushed by the healthcare union SEIU-United Healthcare Workers West. This proposal seeks to impose a one-time 5% tax on residents with a net worth exceeding $1 billion.
Although the measure still needs signatures to qualify for the November 2026 ballot, its potential retroactive clause is causing panic. If passed, it would apply to anyone living in California on January 1, 2026. This gives the ultra-wealthy just a narrow window to establish residency elsewhere to avoid the massive levy.
Staggering Personal Financial Stakes
The financial implications for Thiel and Page are colossal. Larry Page, with an estimated net worth of $258 billion, could face a tax bill surpassing $12 billion. Peter Thiel, whose fortune is valued at around $27.5 billion, would owe more than $1.2 billion.
In preparation, Thiel, who owns a mansion in Hollywood Hills and runs Thiel Capital from Los Angeles, has been scouting for new office locations outside California. Page, a long-time resident of Palo Alto, has discussed leaving by year's end. Notably, three limited liability companies linked to him have recently filed incorporation documents in Florida, a state with no income tax.
A Looming Talent Exodus from Silicon Valley?
This proposed tax has ignited a fierce debate about the future of innovation and wealth in California. Tech investor Chamath Palihapitiya warned that the tax would trigger "an exodus of the state's most talented entrepreneurs" and stated he is giving "serious consideration" to moving to Texas.
Defense tech startup co-founder Palmer Luckey expressed grave concerns, stating the tax could force founders to sell company stakes. "One market correction and I'm screwed for life," he wrote, highlighting fears of wage garnishment.
Even California Governor Gavin Newsom has opposed the measure, cautioning it will drive wealthy residents to lower-tax states like Texas and Florida. However, Democratic Representative Ro Khanna, who represents Silicon Valley, dismissed the threats of a billionaire flight with sarcasm, echoing a historical response to wealthy industrialists: "I will miss them very much." He argued that public investment helped build the tech industry and a modest wealth tax won't halt innovation.
The coming weeks will be critical as the state watches whether these tech titans follow through on their exit plans, potentially marking the beginning of a significant shift in where America's wealth and innovation capital resides.
