Tax fight puts California on collision course as billionaires leave for red states

By Fox News · Fox News

California’s fight over taxes and regulation is colliding with a broader economic shift, as wealthy residents and entrepreneurs take their money elsewhere — delivering a windfall of capital , jobs and taxpayers to red-state competitors. That shift is already visible in migration patterns across the country. From 2021 to 2024, Texas and Florida posted the largest net population gains, while California and several northeastern states recorded some of the steepest losses, according to IRS and U.S. Census Bureau data. CALIFORNIA WEALTH TAX PROPOSAL HEMORRHAGES $1T AS BILLIONAIRES FLEE Those migration trends are now colliding with a political fight over how the Golden State taxes its wealthiest residents. At the center of the controversy is a proposed ballot initiative backed by the Service Employees International Union that would impose a one-time 5% wealth tax on Californians with assets exceeding $1 billion, including unrealized gains. If the measure qualifies for the November ballot and is approved by voters, it would apply retroactively to anyone who lived in California as of Jan. 1, 2026. Supporters say the measure would boost funding for healthcare and education, while critics warn it could drive investment and talent out of the state. Those concerns come as income migration data already shows money moving out of several traditionally blue states. IRS figures indicate several traditionally blue states losing billions of dollars in adjusted gross income — the income used to calculate federal taxes — as residents move to lower-tax states, particularly across the South and Sun Belt. CONSERVATIVE STATES SEE LOWER INFLATION THAN LIBERAL ONES NATIONWIDE, WHITE HOUSE DATA SHOWS Steve Moore, co-founder of Unleash Prosperity, said California’s tax base will continue to erode as more high-profile tech billionaires relocate ahead of the proposed wealth tax. "California's tax base took a massive hit at the end of last year. Silicon Valley billionaires left the state, taking…