Crypto Titans Revolt Over California’s 5% Wealth Tax Proposal

Leaders in crypto and tech are pushing back hard against a proposed one-time 5% wealth tax in California. The measure would hit net worth above $1 billion and would tax paper gains—assets counted even if they haven’t been sold.

Supporters say the money would pay for health programs and other public services. Based on official estimates, the plan could raise up to ~$100 billion from roughly 200 very wealthy residents.

What The Tax Would Do

According to the initiative’s fiscal outline, the levy would apply to net worth on January 1, 2026, and it targets unrealized gains — stocks, company stakes, and other holdings valued on paper.

Taxpayers could pay in one lump sum or stretch payments over five years, with interest if they choose the latter. For example, someone with $20 billion in assets would face about $1 billion in liability under a 5% rule. A resident with more than $200 billion could see a bill exceeding $10 billion.

Industry Pushback And Warnings

Based on reports, several high-profile crypto firms and founders say the measure would drive people and money out of California. Executives named in coverage include Hunter Horsley, Jesse Powell, Chamath Palihapitiya, Nic Carter, Alexis Ohanian, and other tech figures.

Their message is simple: large, sudden tax bills on paper wealth could force owners to sell stakes or move to other states, which they argue would cost jobs and investment in the local economy. Some say the rule would be especially tough on founders whose wealth is tied up in startups.

Supporters offer a different view. They argue the charge would target a small group—high net worth individuals—and provide funds for health care, education, and food programs without increasing taxes for middle-income families.

Representative Ro Khanna has been mentioned as a backer who sees the revenue as a way to strengthen public services.

The math is clear in one sense: 5% of very large sums adds up quickly. Estimates put potential revenue as high as ~$100 billion. But collection is less certain.

Critics point to past cases where wealth taxes produced less money than forecast because some taxpayers relocated or shifted assets offshore. Valuing private companies and volatile holdings like crypto presents practical challenges, and that could make administration complex.

Featured image from Pexels, chart from TradingView