California's Crypto Billionaires: Will They Really Go?

California, home to many crypto billionaires, is witnessing a stir as a new tax plan proposes a 5% tax on assets for residents worth over $1 billion. This could bring in up to $100 billion. The tax, which is on wealth not income, would also include a one-time fee of $1 billion for those worth over $20 billion. It applies to gains that haven't been realized yet.

Billionaires React

Many billionaires are upset and considering leaving California. Jesse Powell, co-founder of Kraken, called the tax a "theft." He believes billionaires will take their spending, jobs, and philanthropy with them. Hunter Horsley, CEO of Bitwise, said many are discussing leaving. Chamath Palihapitiya, a venture capitalist, claimed $500 billion worth of people have already left.

Will They Really Go?

History shows that the rich don't move often. A study found less than 0.01% of the richest households relocated after wealth tax reforms in Norway, Sweden, and Denmark. In the UK, only a small percentage of millionaires left despite tax hikes. The ultra-wealthy tend to stay put because of family, social networks, and business ties.

The Debate Continues

Some billionaires blame wasteful spending for California's issues. David Sacks, a crypto billionaire, said the tax is to fund fraud. He pointed out that states like Texas and Florida don't have income taxes. However, the tax proposal is still not on the ballot. It needs 850,000 signatures to get there.

The Future of Crypto in California

California's crypto industry might find it easy to move. Nic Carter, a venture partner, said capital is more mobile now. Global startups are common, even at scale. But will they really leave? Or is this just a threat?

The Potential Benefits

The tax could bring in a lot of money. It might be worth it for California, even if some billionaires leave. The benefits in revenue could outweigh the losses. Only time will tell if the crypto-rich will stay or go.