California Billionaire Tax Plan Triggers Crypto Industry Pushback

A new ballot proposal in California has sparked sharp criticism from crypto executives and investors. The measure, called the 2026 Billionaire Tax Act, would place a 5% annual tax on net wealth above $1 billion. Supporters say the money would fund health care and state aid programs. Critics say the plan would push capital and business leaders out of the state.

The SEIU United Healthcare Workers West union filed paperwork to place the initiative on the November 2026 ballot. If approved by voters, the tax would apply to residents with net wealth above the $1 billion mark.

The proposal would tax both realized and unrealized gains. That means wealth tied up in stock, private companies, or other assets would be counted even if it has not been sold. For some taxpayers, this could force asset sales to cover the bill.

The tax could be paid in one lump sum or spread over five years with interest. Either option would require steady cash flow. For founders whose wealth is mostly paper gains, that cash may not exist without selling shares or moving assets.

Industry figures argue this setup creates direct pressure to leave the state. Once residency changes, California would no longer have a claim on future wealth growth.

Crypto Leaders Warn of Capital Exit

Kraken co founder Jesse Powell said the tax would be a breaking point for many wealthy residents. In a post on X, he said billionaires would leave and take jobs, spending, and charity with them.

Bitwise CEO Hunter Horsley echoed the view, saying the plan targets private citizens rather than fixing waste inside state programs. Castle Island Ventures partner Nic Carter questioned whether backers had studied how fast capital can move today. He compared one time wealth taxes to a signal that more aggressive steps could follow.

ProCap BTC chief investment officer Jeff Park also said the proposal would likely push large pools of capital out of California.

Supporters Point to Social Spending Goals

US Representative Ro Khanna has defended the plan online. He argues that more funding for childcare, housing, and schools would support long term innovation and growth. Khanna represents California’s 17th district and has often backed crypto policy at the federal level.

Opponents counter that money may not reach its targets. Austin Campbell of New York University cited a December report from the California State Auditor. The audit flagged cases of missing records and weak support for how public funds were used.

Dune CEO Fredrik Haga pointed to Norway as a case study. He said similar taxes there led to more than half of the wealth held by the top 400 taxpayers moving abroad, while tax revenue fell short of goals. As the 2026 vote approaches, the proposal is shaping up as a key test of how far states can push wealth taxes without driving money away.