California is bleeding its wealthiest residents at an alarming rate.
Gavin Newsom's tax-and-spend policies finally pushed them over the edge.
And Elon Musk's lawyer dropped one ultimatum on Gavin Newsom that has California billionaires racing for the exits.
Power attorney delivers ultimatum to Newsom over wealth grab
Elon Musk's attorney Alex Spiro just fired a warning shot that should make every California Democrat break out in a cold sweat.
The celebrity lawyer sent a letter to Governor Gavin Newsom on December 11 demanding he kill a proposed 5% tax on billionaires or watch California's richest residents flee the state permanently.
"It will trigger an exodus of capital and innovation from California," Spiro wrote on behalf of unnamed billionaire clients.¹ "Our clients have made clear they will permanently relocate if subjected to this tax."¹
Spiro represents some of the biggest names in business and entertainment including Elon Musk, Jay-Z, Kim Kardashian, and New England Patriots owner Robert Kraft.
The letter warns Newsom to "discourage signature gathering, oppose qualification, and if necessary, campaign against passage" or face a legal battle and "embarrassing press coverage" over the wealth tax initiative.²
The proposed California Billionaire Tax Act would impose a one-time 5% levy on the net worth of roughly 200 California residents worth more than $1 billion.³
That includes assets like stocks, private company shares, real estate, artwork, and intellectual property.
Union groups backing the measure claim it could raise $100 billion over five years to offset Trump Administration cuts to California's bloated healthcare spending.⁴
But Spiro argues the tax amounts to an "uncompensated confiscation of property" that violates constitutional protections.⁵
Tech titans making concrete plans to abandon California
The threats aren't empty bluster.
Google co-founder Larry Page has already filed Florida incorporation documents and discussed leaving by year's end.⁶
Page faces a potential $12 billion tax bill under the proposal.⁷
Venture capitalist Peter Thiel opened a new Miami office in December and signed a lease for Thiel Capital operations outside California.⁸
Thiel's exposure sits around $1.2 billion.⁷
Investor Chamath Palihapitiya warned on his podcast that the billionaire tax "has single-handedly changed the trajectory of the California economy by $100 to $200 billion over the next five to 10 years."⁹
"There will be no billionaires left in California," Palihapitiya predicted.⁹
Palmer Luckey, founder of defense tech company Anduril, wrote on X that he already paid hundreds of millions in taxes when he sold his first company.¹⁰
"Now me and my cofounders have to somehow come up with billions of dollars in cash," Luckey explained about the proposed wealth tax.¹⁰
Billionaire hedge fund manager Bill Ackman called California "on a path to self-destruction" if the measure moves forward.¹¹
Elon Musk himself argued on X that his wealth exists mostly in Tesla and SpaceX shares that can only grow by "producing more products and services for the public."¹²
Musk already moved from California to Texas in 2020 after clashing with the state's COVID lockdown policies.
Newsom faces impossible choice between base and tax revenue
Gavin Newsom finds himself trapped between his Socialist Democrat base demanding wealth redistribution and the economic reality that California depends on these billionaires' tax revenue.
The Governor already publicly opposes the billionaire tax.
"You can't isolate yourself from the 49 other states," Newsom warned at The New York Times DealBook conference.¹³ "We're in a competitive environment. You've got to be pragmatic about it."¹³
Newsom spokesman Dan Newman set up a committee called "Stop the Squeeze" to fight the ballot initiative.¹⁴
But here's the problem for Newsom.
He has no power to veto a ballot measure if California voters approve it in November 2026.
The tax would apply retroactively to anyone living in California on January 1, 2026.
That deadline is driving billionaires to establish residency elsewhere before year's end.
Union groups need 874,641 signatures to qualify the measure for the ballot and claim they're confident hitting that threshold.¹⁵
The Service Employees International Union–United Healthcare Workers West is leading the charge.
U.S. Senator Bernie Sanders already endorsed the campaign.¹⁶
California has never successfully passed a wealth tax targeting net worth rather than income.¹⁴
Previous wealth tax proposals died in the legislature under opposition from Newsom.¹⁴
But Democrats increasingly face pressure from their radical base to punish success and redistribute wealth.
The California Secretary of State's own analysis warned the tax could lose "hundreds of millions of dollars or more per year" in income tax revenue if wealthy residents leave.¹⁷
That's exactly what Spiro predicted in his letter.
The wealth tax would "exchange a one-time windfall for the permanent loss of billions in annual income taxes, capital gains taxes, property taxes, and economic activity."¹⁸
California already watched Elon Musk move Tesla headquarters to Texas.
Now the Golden State risks losing the innovation economy that made Silicon Valley the envy of the world.
Tech billionaires built their fortunes in California because of the talent pool, venture capital ecosystem, and entrepreneurial culture.
But Democrats' insatiable appetite for other people's money finally broke the camel's back.
These billionaires can run their companies from anywhere with high-speed internet.
Florida and Texas offer sunshine, lower costs, and no state income tax.
The exodus has already begun.
And Gavin Newsom's only move is hoping voters reject a Socialist wealth grab that his own party's base demands.
¹ "Elon Musk's lawyer urges Newsom to kill billionaire tax — or else," New York Post, December 30, 2025.
² Ibid.
³ "California's billionaire tax, explained," San Francisco Standard, December 30, 2025.
⁴ Ibid.
⁵ "Read the letter celebrity lawyer Alex Spiro wrote to Gavin Newsom," Business Insider, December 29, 2025.
⁶ "A new push in California has these tech titans looking for the exit," TheStreet, December 29, 2025.
⁷ "Elon Musk's lawyer urges Newsom to kill billionaire tax — or else," New York Post, December 30, 2025.
⁸ "Peter Thiel opens Miami office as California billionaires threaten to flee," Red94, January 1, 2026.
⁹ "California's billionaires may have 2 choices in 2026: Leave the state or pay $50 million or more," Deseret News, December 23, 2025.
¹⁰ "Read the letter celebrity lawyer Alex Spiro wrote to Gavin Newsom," Yahoo Finance, December 29, 2025.
¹¹ "A new push in California has these tech titans looking for the exit," TheStreet, December 29, 2025.
¹² "Business leaders from Palmer Luckey to David Sacks react to California's proposed billionaire tax," Business Insider, December 30, 2025.
¹³ "California's billionaire tax, explained," San Francisco Standard, December 30, 2025.
¹⁴ "Coming in 2026: A Battle Over California Billionaire Tax Proposal," CPA Practice Advisor, December 1, 2025.
¹⁵ "A tax on billionaires could be headed to California ballot," CalMatters, October 24, 2025.
¹⁶ "Tech moguls threaten to leave California as billionaire tax proposal gains support among unions," ABC7 San Francisco, December 31, 2025.
¹⁷ "Peter Thiel opens Miami office as California billionaires threaten to flee," Red94, January 1, 2026.
¹⁸ "Elon Musk's lawyer urges Newsom to kill billionaire tax — or else," New York Post, December 30, 2025.
