California billionaires are giving away their wealth to avoid the proposed billionaire tax
As the cost of doing business and the cost of living continue to rise in the Golden State, South Florida is reaping the benefits as tech professionals and other wealthy business owners find a safe financial haven in the Sunshine State.
Rather than handing over their wealth to the California state government, wealthy Californians are finding creative, tax-free ways to reduce a billionaire’s potential tax impact — including cashing out.
Some high-net-worth residents in the Golden State are deliberately reducing their balance sheets through charitable giving or real estate because they don’t trust Sacramento to use their tax dollars effectively, according to a recent Wall Street Journal report.
“People are taking steps to implement the tax law before it changes all the time. This is another example of that,” HCVT partner and consultant Andrew Katzenstein told the Journal, adding that he works with many clients to help them navigate the proposed wealth tax.
In April, the Service Employees International Union-United Healthcare Workers West (SEIU-UHW) said it had collected more than 1.55 million signatures, according to a press release – nearly doubling the 875,000 signature requirement – to put a one-time tax on billions of dollars on the California ballot.
GIVING BIRTH TO THEIR FUTURES, CALIFORNIA’S EXODUS RESTS ON FLORIDA’S ‘GOLD’
The California Billionaire Tax Act would target a total of about 200 residents and impose a one-time 5% tax on the net worth of California residents with assets over $1 billion. The tax is due in 2027, and taxpayers can spread the payments over five years, with interest, according to the Legislative Analyst’s Office.
Shoppers visit Rodeo Drive in Beverly Hills, California, Saturday, July 12, 2025. (Getty Images)
If the measure is approved by voters in November, anyone who was a California resident on Jan. 1, 2026, you will owe tax.
For those who didn’t move their primary residence by that deadline, they and their finance teams are working to reduce customer prices below the multi-billion dollar mark, including raising philanthropic donations, as customers will “keep their money going to charities that… [they don’t] trust them to use the money effectively,” writes the Journal.
Other measures aimed at reducing the tax burden include completely restructuring balance sheets, delaying private equity financing rounds and removing real estate assets from corporate LLCs and placing them under personal names or revocable trusts to legally protect their assets.
Agency founder and CEO Mauricio Umansky discusses California’s proposed wealth tax and criticizes the policies for the country’s failures in ‘The Bottom Line.’
Wealthy residents also consider buying expensive tangible assets, such as art and boats, while keeping them outside of California for at least 270 days a year to legally avoid taxes.
“I like to tell my students this principle of tax planning: Pigs are fed, pigs are slaughtered,” University of Missouri law professor David Gamage told the newspaper. “You can get away from some of the problems with reconfiguration, but if you go too far and get greedy, you can get into trouble.”
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As labor and energy costs rise in California, small business owners say the Golden State’s minimum wage laws and gas tax are hampering their operations.
Some prominent people who moved their residences or businesses out of California before Jan. 1, 2026, include Google founders Larry Page and Sergey Brin, Meta CEO Mark Zuckerberg, Peter Thiel, Steven Spielberg, Uber founder Travis Kalanick and auto loan executive Don Hankey.
A majority of California voters — about 54% — generally support the billionaire tax, according to a May poll by the Public Policy Institute of California.
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