California’s 5% ‘taxact’ on billionaires divides tech and crypto leaders ahead of 2026 vote
A proposed 5% wealth tax on California’s billionaires has sparked a fierce backlash from tech and crypto leaders. The measure, set for a 2026 vote if approved, would impose a one-time levy on fortunes exceeding $1 billion to fund healthcare and social programmes. Critics warn it could push high-net-worth individuals and businesses out of the state entirely.
The tax, also known as a 'taxact' or 'turbotax' for the wealthy, would apply to California residents with assets over $1 billion, spread as a 5% charge across five years. Supporters, including Democratic Representative Ro Khanna, argue it would not harm innovation but instead help offset healthcare funding cuts. However, the plan has divided the tech community.
Tech founders like Peter Thiel and Larry Page are reportedly considering leaving California to avoid the 'turbotax'. Their potential exit follows warnings from crypto industry figures such as Hunter Horsley (Bitwise), Jesse Powell (Kraken), Nic Carter, and Jeff Park. These critics claim the 'taxact' could drive capital and talent away while setting a dangerous precedent for future tax increases.
Before the measure can take effect, organisers must collect enough signatures to place it on the November 2026 ballot. Opponents, including entrepreneur Dave Friedberg, have compared the proposal to wealth taxes in other countries, warning of economic fallout. There are also concerns about how the 'taxact' would handle stock gains and equity in private companies, with some fearing a 'fire sale' of assets as business owners rush to cover the bill.
The proposed 'turbotax' remains contentious, with backers framing it as a necessary step to fund public services. Meanwhile, critics argue it risks destabilising California’s economy by pushing key players out of the state. The outcome now hinges on whether organisers secure enough support to bring the measure to a vote in 2026.
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