Another Billionaire Leaves California to Avoid the Wealth Tax

I don’t think this one has been reported before this weekend. If it was I missed it. Travis Kalanick, the billionaire founder of Uber, has left California behind and is now living in Texas. HIs reason is obvious based on the timing.

Billionaire and Uber co-founder Travis Kalanick officially joined the exodus from California, revealing he moved to Austin, Texas, just weeks before a proposed wealth tax could have targeted his estimated $3.6 billion fortune.

“Just to be clear, on December 18, I moved to Texas. I don’t know what’s so specific about December 18, but let’s just say it’s prior to January,” Kalanick said in an interview with TPBN.

“I get a little bit [of] FOMO on like, these people going to Florida. I’m like, dude! Why so much Florida action?” he continued. “Come on, homies.”

The people moving to Florida are fellow billionaires including Larry Page, Sergei Brin and Mark Zuckerberg, all of who have recently spent tens of millions buying new property in the very wealthiest parts of Miami. An LA Times story last week indicate that there were many more billionaires in California who were making the move but that many of them were keeping their names out of the media for the moment.

“The California guys, all billionaires, are running away from the wealth tax,” said [Brett] Harris, who represented Zuckerberg in the Indian Creek deal. “I have three things under contract north of $600 million.”

Chase Berger, a partner with the law firm Ghidotti Berger, who handles high end real estate transactions across Florida, said he’s seen an uptick in what he calls “stealth ownership,” creating Florida land trusts for wealthy clients who prefer to mask their association with a purchase.

“I used to do a handful of these a year,” he said but amid the recent migration, “now it’s dozens” adding, “It’s a residency war with California that they’re fighting.”

The tax hasn’t even made it on the ballot yet but if it does it will need to get a majority of voters to approve it this November. If that happens the tax would retroactively apply to any billionaire still in the state as of January 1, 2026. And that’s why Travis Kalanick (and others) have left the state prior to January. They are making sure they have some record of a major effort too move prior to the deadline, probably so they can argue about their residency in court if it becomes necessary.

A poll published last week found that the tax is liked by about half of surveyed voters in California, meaning it could pass if it makes it onto the ballot.

Fifty percent of voters said they would vote in favor of a one-time, 5% tax on the wealth of the Golden State’s billionaires, while 28% say they vote down the measure, according to a UC Berkeley Citrin Center for Public Opinion Research-POLITICO poll, which was conducted with a sample of 1,220 registered voters between Feb. 25 and March 3 and had a mean squared error of +/- 3.0%. 

About 23% of voters remain undecided, the poll shows. 

However, despite capturing most of the voters’ support, the poll found that some consequences of the proposed billionaire tax measure weighed heavily on voters’ minds…

More than half of voters (54%) said they were concerned about wealthy individuals leaving the state to avoid the tax. Even more voters (63%) were concerned that the tax measure would lead California businesses to relocate to other states.

In other words, there is plenty of potential for the negatives to grow which may explain why there are so many articles about the wealth tax which breeze over the fact that at least half the wealth California wanted to tax is already gone. So, for instance, the NY Times has done a pretty decent job covering the decision of some of the billionaires to leave the state, but you still get stuff like this appearing the paper today:

Many of the state’s wealthiest residents have gone into overdrive to stop the ballot initiative. Billionaires, including the venture capitalist Peter Thiel and the Google co-founder Sergey Brin, have spent millions on the effort and threatened to leave the state. In some cases, they’ve already begun to cut ties…

Late last year, Brin and his fellow co-founder of Google, Larry Page, began cutting ties with the state. Page filed documents to relocate or move 45 limited liability companies out of the state. Brin did the same with 15 California L.L.C.s, including one tied to a superyacht and another tied to a private air terminal.

Again, the story recites some of the facts but doesn’t offer any context. Brin and Page are two of the five wealthiest billionaires in the state, representing almost 25% of the wealth held by all the billionaires in the state. When you add in Zuckerberg, just those three people combined, you’ve cut the amount of taxable wealth in the state by a third. Add to that all of the other billionaires who are leaving, like Kalanick, Peter Thiel and even Steven Spielberg (who moved to New York prior to the Jan. 1 deadline) and there is zero chance this tax can bring in half the amount of money it promised. No doubt California will fight it in court but it will lose. In fact, the entire gimmick of the retroactive tax could wind up at the Supreme Court where California will likely lose. 

Rather than admit as much, the media keeps downplaying what is happening. The NY Times article gives the last word to one of the tax’s designers, economist Gabriel Zucman:

“You need some states like California to pave the way and to show that it’s possible — you can tax billionaires, it can generate a lot of tax revenue, and the sky is not going to fall.”

The proponents of the tax keep saying it’s all going to work out despite the fact that, for California, the sky has already fallen.

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