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Rather than hand over their fortunes to the California state government, wealthy Californians are finding creative, tax-efficient ways to minimize potential billionaire-tax impact — including giving their money away.
Some high-net-worth residents in the Golden State are intentionally reducing their balance sheets through philanthropy or real estate strategies because they do not trust Sacramento to spend their tax dollars effectively, according to a recent Wall Street Journal report.
“People take steps to take advantage of the tax law before it changes all the time. This is just another example of that,” HCVT partner and advisor Andrew Katzenstein told The Journal, adding that he is working with multiple 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 double the 875,000-signature requirement — to put a one-time tax on billionaire assets on the California ballot.
FLEEING FOR THEIR FUTURES, A CALIFORNIA EXODUS UNLEASHES A FLORIDA ‘GOLD RUSH’
The California Billionaire Tax Act would target the net worth of roughly 200 residents and impose a one-time 5% tax on the net worth of California residents with assets exceeding $1 billion. The tax would be due in 2027, and taxpayers could spread payments over five years, with interest, according to the Legislative Analyst’s Office.
If the measure is approved by voters in November, anyone who was a California resident on Jan. 1, 2026, would owe the tax.
For those who did not move their primary residence by that deadline, they and their financial teams are working to reduce client valuations below the $1 billion mark, including by ramping up charitable donations, as clients would “rather their money go to charities that… do good work than to California’s government, which [they don’t] trust to use the funds effectively,” The Journal wrote.
Other methods aimed at minimizing the tax burden include restructuring balance sheets entirely, delaying private funding rounds and pulling real estate holdings out of corporate LLCs and placing them directly under personal names or revocable trusts to legally shield their property.
Wealthy residents are also considering purchasing expensive tangible assets, such as art and yachts, while keeping them outside California for at least 270 days per year to legally avoid the tax.
“I like to tell my students this maxim of tax-planning: Pigs get fed, hogs get slaughtered,” University of Missouri law professor David Gamage told The Journal. “You can often get away with some amount of restructuring affairs, but if you go too far and get too greedy, you can get in trouble.”
Some of the public figures who moved their residences or businesses out of California before Jan. 1, 2026, include Google co-founders Larry Page and Sergey Brin, Meta CEO Mark Zuckerberg, Peter Thiel, Steven Spielberg, Uber co-founder Travis Kalanick and car loan magnate Don Hankey.
The 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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