For Immediate Release, April 22, 2026
Contact: Jared Walczak, [email protected]
David Kline (916) 893-2614 or [email protected]
SACRAMENTO – The California initiative proposing a one-time 5 percent wealth tax on billionaires would reduce ongoing state tax revenue $3.53 billion to $4.49 billion per year due to billionaire departures and their economic spillover effects, according to research published today by the California Tax Foundation.
Already, the publicly identified departures of nine billionaires have created a $2.77 billion recurring tax revenue loss, according to “Ongoing State Tax Revenue Implications of the 2026 California Billionaire Tax Act,” prepared by national tax expert Jared Walczak.
“Actual out-migration almost certainly already exceeds that which has been publicly reported, and continued departures should be expected should the initiative advance,” Walczak added. “The 2026 California Billionaire Tax Act is, at least for now, a one-time tax. Its effects on the rest of California’s tax base, however, could be substantial and persistent. The implementation of this wealth tax, moreover, could affect future decisions about where to locate tech startups and other businesses, by increasing the perceived likelihood of future wealth taxation.”
Walczak, a visiting fellow with the foundation, estimates the ongoing annual reductions in revenue under scenarios based on announced and anticipated billionaire departures as well as literature-derived estimates of out-migration. His analysis considers direct impacts on individual income and, to a lesser extent, sales tax collections and other effects. The paper analyzes the billionaire population under four distinct categories rather than as a homogenous group.
“Billionaires’ propensity to leave, and the degree to which they can avoid California income taxation by establishing domicile elsewhere, will vary based on their primary source of wealth and income,” Walczak notes.
The California Tax Foundation, a nonprofit organization founded in 1980, improves public policy through independent, nonpartisan research.