Chamath Palihapitiya, CEO of venture capital firm Social Capital and AI startup 8090, said he will remain in California and “pay the taxes” despite a proposed 5% one-time wealth tax on net worths over $1 billion, set to go before voters in November, even as many peers relocate over rising state levies.
In his appearance at CNBC’s “Squawk Pod” on Tuesday, Palihapitiya said, “It’s given me everything. So, I will not leave and I will keep building companies there and hiring people there.”
Palihapitiya Calls Tax ‘Dumb,’ Warns of Founder Exodus
“The reality in California is the overwhelming majority of the taxes are paid by people making less than $150,000,” Palihapitiya said, arguing the measure fails to address the state’s core fiscal problems rather than targeting the ultra-wealthy.
He also warned the policy could unfairly hit early-stage founders whose paper valuations rise sharply without giving them cash to cover the resulting tax bill. “He may be only making $100,000 a year. This is why this law is so dumb,” Palihapitiya said, predicting the measure would take 15 years to meander through the courts at the state and federal level.
Billionaire Exodus Claims Meet a Data Check
Palihapitiya has been a vocal opponent of the tax from the outset. In January, he said people he knows with a combined net worth of about $500 billion had already left California over the proposal, cautioning it could widen the state’s budget deficit rather than close it.
In April, he called the measure “actually an Everyone Tax” on X, warning it could expand beyond billionaires without voter approval.
The claim of large-scale wealth leaving California is complicated by the California Billionaire Wealth Tracker, an independent database created by economists Jasper Boll, Emmanuel Saez and Gabriel Zucman using real-time Forbes billionaire data. As of this writing, the tracker shows that no billionaires have been added to or removed from California residency since Jan. 1, although it does not monitor business entity relocations.
Palihapitiya’s decision to remain comes as other technology leaders have reportedly reduced their connections to California. Google co-founder Sergey Brin moved or re-registered more than a dozen California business entities before Christmas, while co-founder Larry Page also scaled back his ties to the state.
Not all technology leaders agree with leaving California. Nvidia (NASDAQ:NVDA) CEO Jensen Huang, whom Palihapitiya mentioned during his CNBC appearance as another executive who has chosen to remain in the state, said in April, “Move to California. Don’t leave. It’s the highest taxes in the world, but it’s OK.”
Every Dollar Will Be Traced
Despite his criticism of the proposal, Palihapitiya said he does not plan to personally challenge the tax.
“You want to take a piece of flesh, fine, take it,” Palihapitiya said, indicating that he does not intend to fight the tax personally. But he said he does not believe it will help the people it’s meant to support, “It’s very unlikely it’s going to have any effect on them,” he said, adding, “I’m not okay with it.”
Still, he said the moment offers a rare check on government spending. “Every single dollar will be traced,” Palihapitiya said, comparing public scrutiny of the funds to “Inspector Clouseau with a microscope.”
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: CarlaVanWagoner / Shutterstock.com
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