- A proposed 5% wealth tax would apply to net wealth above $1 billion in California and target unrealized gains.
- Several crypto executives say the measure would prompt wealthy residents to leave the state and move capital abroad.
- Supporters say revenue would fund health care and social programs, but critics point to a December audit that flagged spending problems.
A California ballot initiative called the 2026 Billionaire Tax Act would impose a 5% tax on net wealth above $1 billion to finance health care and state assistance programs, according to SEIU United Healthcare Workers West. The proposal would tax unrealized gains and allows payment in a single installment or over five years with interest.
Technical term: Unrealized gains — profit on assets that have increased in value but have not been sold.
Crypto industry leaders responded sharply. Hunter Horsley of Bitwise and Jesse Powell, co-founder of Kraken, said the tax would push billionaires out of California. “I promise you this will be the final straw. Billionaires will take with them all of their spending, hobbies, philanthropy and jobs. Solve the waste/fraud issue,” Powell wrote.
Others warned of capital mobility and reduced revenue. Nic Carter of Castle Island Ventures asked whether planners had analyzed how mobile capital is and added that a one-time wealth tax signals future levies. “I generally like Ro and have interacted with some of staff who have always been fantastic, but I do wonder — have they done an analysis of capital mobility in response to wealth taxes?” he wrote, later adding, “It seems to me that capital is more mobile than ever…”
Jeff Park and others raised similar concerns. Rep. Ro Khanna has argued the revenue would improve childcare, housing, and education and benefit innovation.
Critics also pointed to a December audit from the California State Auditor that found unaccounted-for or poorly justified expenditures. An online post and Horsley cited that report. “But what Ro has a plan for is not pulling the fire alarm and fixing this. Rather what he’s been spending time on is a new private citizen asset confiscation to have more money for the government. Politicians have long forgotten their role is to be a servant,” Horsley said.
Fredrik Haga, co-founder of Dune, compared the proposal to Norway’s past tax on unrealized gains and said it led to wealthy taxpayers moving abroad. “Friendly reminder to California: Taxes on unrealized capital gains have led to more than half of the wealth held by Norway’s top 400 taxpayers moving abroad,” he wrote.
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