California's Billionaire Tax Sparks Exodus Fears Among Millionaires

California’s proposed “billionaire tax” may soon haunt the millionaires as a report has said that apart from the state’s mega-rich who are packing their bags, other wealthy are looking to relocate.

Citing a top tax advisor, a report by The New York Post says that millionaires are now eyeing the exits over growing fears that the ‘controversial’ wealth levy could eventually be tweaked to target those with smaller fortunes.

“I started getting calls from people who are saying, ‘Oh, it could be permanent?'" David Lesperance, a tax advisor to high-net-worth families and founder of Lesperance & Associates, was quoted as saying. He noted that clients worth well under $1 billion are already hatching exit plans.

What California millionaires are fearing

The report said that the ‘fear’ among millionaires intensified following recent comments from Emmanuel Saez, a UC Berkeley professor and author of the billionaire tax proposal. During a debate, Saez admitted that the tax on a billionaire's total assets might not remain a one-time event, stating, “If there is another one, I don’t think it’s going to be a one-time tax. You can’t surprise billionaires more than once.”

Further, the California Business Roundtable issued a memo claiming the state legislature could eventually alter the tax to include middle-class households. While the backing union, SEIU United Healthcare Workers West, strongly denies this, arguing that amendments cannot alter the fundamental purpose of the act, the report noted.

The proposed tax is also said to be raising alarms due to how it might be interpreted by California’s Franchise Tax Board. Lesperance warned that the rules leave room for interpretation regarding corporate values. For example, Meta CEO Mark Zuckerberg could potentially be taxed based on his 60% voting shares of the company's $1.6 trillion valuation – facing a $48 billion tax bill.

As the debate heats up, tax-friendly states like Nevada, Texas, and Florida are experiencing a surge in interest from wealthy Californians looking to protect their assets before election day.