In late December 2025, a controversial ballot initiative known as the 2026 Billionaire Tax Act has ignited fierce opposition from crypto and tech leaders. Backed by the Service Employees International Union–United Healthcare Workers West (SEIU UHW), the proposal would impose a one-time 5% tax on net wealth exceeding $1 billion (including unrealized gains on assets like stocks, crypto holdings, private equity, and more) to fund Medi-Cal healthcare programs and address a projected $30 billion shortfall.
Payments could be made in a lump sum or spread over five years with a 7.5% deferral interest charge. While supporters argue it targets the state’s ultra-wealthy to support public services, critics — especially in the crypto space — warn it could force founders and investors to liquidate illiquid assets (like equity or crypto) just to pay taxes, even without realized cash gains. This risks diluting ownership, triggering forced sales, and ultimately driving capital, jobs, philanthropy, and innovation out of California.
Prominent voices include:
- Kraken co-founder Jesse Powell, who called it “a 5% theft of unrealized gains” and the “final straw,” predicting billionaires would relocate their spending and businesses.
- Bitwise CEO Hunter Horsley, noting many key contributors are already discussing or deciding to leave.
- Other figures like Dune co-founder Fredrik Haga (citing Norway’s wealth tax exodus) and venture capitalists highlighting risks to startup ecosystems.
The tax has sparked debates on fiscal responsibility, government waste (amid reports of billions in unaccounted funds), and whether it would truly raise revenue or accelerate an exodus to tax-friendly states like Florida or Texas. Some billionaires, including tech icons, are reportedly already exploring moves to mitigate exposure. The initiative is in the signature-gathering phase for a potential November 2026 ballot — its fate remains uncertain, but the backlash is growing fast.
This story exploded on X over December 28–29, 2025, with clips of Powell’s posts, analyses from crypto outlets, and heated discussions on taxation, innovation, and crypto’s role in wealth creation among traders, founders, and policymakers.
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What’s your take — will this wealth tax push more crypto wealth out of California, or is it needed for public funding? Drop your thoughts below 👇