Executives at major cryptocurrency companies have pushed back against the Billionaire Tax Act initiative proposed in California. They are confident the measure will trigger a mass exodus of entrepreneurs from the state.
The legislation outlines a 5% levy on net assets exceeding $1 B to fund social programs.
Bill Details
The SEIU United Healthcare Workers West union has submitted paperwork to place the bill on the general election ballot in November 2026. The initiative’s authors aim to direct the raised funds toward supporting the healthcare system and state assistance programs.
The primary friction point concerns the taxation of unrealized gains. To cover the levy, billionaires would be forced to sell stocks or shares in their companies. The proposal provides two payment options: a one-time lump sum or installments over five years with interest.
Industry Reaction
Kraken co-founder Jesse Powell believes the consequences of the law would be devastating for the state economy. Powell called the initiative the “final straw” for business.
“Billionaires will just move their spending, hobbies, philanthropic projects, and jobs to other regions. Before introducing new levies, solve the problem of waste and fraud,” the executive stated.
Bitwise CEO Hunter Horsley shares a similar viewpoint.
Castle Island Ventures founding partner Nic Carter and ProCap BTC Chief Investment Officer Jeff Park backed their colleagues, pointing to the high mobility of modern capital. Carter questioned whether the bill’s authors had analyzed the risks of capital migration. According to him, one-off wealth taxes signal to capital — comparable to a sovereign default — that investors should expect even tougher measures in the future.
Government Stance
A key defender of the proposal is U.S. Representative Ro Khanna, a Democrat from California’s 17th Congressional District who has previously shown loyalty to the crypto sector. The politician argues the tax is necessary to improve funding for childcare, housing programs, and education. Khanna believes that developing social infrastructure will support American innovation in the long term.
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