The Billionaire Tax Act isn’t even officially on the California ballot yet, but that hasn’t stopped businessmen, entrepreneurs, and investors from fleeing the state, taking $1 trillion in wealth – along with jobs and opportunity – with them.
Tech entrepreneur Chamath Palihapitiya has been keeping track of who’s decided to leave the state in advance of this “temporary” tax.
“We had $2T of billionaire wealth just a few weeks ago. Now, 50% of that wealth has left – taking their income tax revenue, sales tax revenue, real estate tax revenue, and all their staffs (and their salaries and income taxes) with them,” he posted on X this weekend.
“In other words, by starting this ill-conceived attempt at an asset tax, the California budget deficit will explode. And we still don’t know if the tax will even make the ballot.”
Among those who’ve given up on California are Google co-founders Sergey Brin and Larry Page. The New York Times reports that 10 days before Christmas, Brin “terminated or moved 15 California limited liability companies that oversee some of his business interests and investments out of the state” and “more than 45 California limited liability companies associated with Mr. Page filed documents last month to either become inactive or move out of the state.”
Venture capitalist Peter Thiel opened an office for his family investment firm in Miami. David Sacks moved his Craft Ventures office to Austin.
The Billionaire Tax Act would impose a (supposed) one-time, 5% levy on net worth – not income – exceeding $1 billion. Backers say the state desperately needs the money to fill its budget hole.
But California’s financial problems aren’t the result of under-taxing residents. They’re the result of massive amounts of overspending by Democrats who control the state, much of which has been lost to waste and fraud.
Even so, why are tech billionaires pulling up stakes without even knowing whether the measure will get the required 870,000 signatures to make it on the November ballot, much less get approved by voters?
Why? Because they’ve seen firsthand how relentlessly anti-business this one-party state has become and how reckless its voters are.
This is a state, after all, that has managed in the past few years to kill its other golden goose, the film industry – the Wall Street Journal last fall said “L.A.’s Entertainment Economy Is Looking Like a Disaster Movie.”
It’s a state that sits at the top of the list for highest tax rates, but the bottom of the list for just about everything else. (See “Do Californians Realize How Badly They’re Getting Ripped Off?”)
It’s a state that – despite idyllic weather and natural beauty – has driven more than 1.6 million residents away. (See “The Great Divorce Continues.”)
As we noted in this space a couple of weeks ago (See “California’s ‘Get Out Now’ Tax”), “Businesses and people are fleeing because lawmakers and blue voters are stuck in a Bolshevik rut.”
The question is, what will it take to get California’s lawmakers and voters unstuck?
Issues & Insights was founded by seasoned journalists of the IBD Editorials page. Our mission is to provide timely, fact-based reporting and deeply informed analysis on the news of the day – without fear or favor.
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Security Fears Over China’s London Embassy
The UK government is set to approve China’s plans to build the biggest embassy in Europe despite widespread fears that it could be used to target dissidents across the continent, and intercept internet traffic in one of the world’s major financial centers.
The UK government is expected to rule in favor of China’s plan for a large new embassy complex at Royal Mint Court, near the Tower of London. The project would consolidate Beijing’s diplomatic footprint on a single, highly secured site.
Local residents and rights groups have raised security, protest management, and heritage concerns, including about a subterranean “spy” facility. Beijing’s detailed specifications have not been made public, but The Telegraph obtained unredacted copies of the plans, which appear to show a large room with adequate cooling and ventilation for a data center to be built just one meter from fiber-optic cables serving the City of London and Canary Wharf financial centers.
The London Internet Exchange (LINX), of which these form a part, is one of the largest hubs in the world, carrying secure data essential to the operation of the UK and global economies.
Iran Crisis: Tension Lingers Amid Trump’s Threats
Once close allies, the U.S. and Iran have been locked in an often volatile standoff with tensions flaring repeatedly since Iran’s Islamic Revolution.
Tensions have surged again, with U.S. President Donald Trump threatening “very strong action” following a brutal crackdown by Iranian authorities on nationwide protests that have left thousands of people dead.
Iran, for its part, has said it warned neighboring countries that it would strike American bases in the region if the United States launched attacks.
A U.S. official, meanwhile, said Washington was withdrawing some personnel from bases across the region, underscoring fears that the latest confrontation could escalate further.
European Defense Spending
NATO’s European members have rallied to the U.S. call to increase defense spending since Russia’s invasion of Ukraine, with Europe's aerospace and defense index gaining 55% over the past year.
European defense spending for 2025 reached $381 billion, a surge of 62.8% since 2020, with defense investments rising by 150% to €130bn over the same period.
The majority of European nations now have defense budgets above NATO’s 2% of GDP target, with only Germany, North Macedonia, Belgium, Czechia, Portugal, Spain, and Luxembourg sitting at 2%. The U.S. spent about 3.22% of GDP in 2025, while six European countries matched or exceeded that, topped by Poland at 4.5%
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