A prominent Los Angeles billionaire has moved to Nevada. Don Hankey recently purchased a $21 million penthouse. This move is a direct response to California’s proposed wealth tax. Hankey is a lifelong California resident. The proposed tax targets the state’s wealthiest individuals. It’s a one-time 5% levy on assets of billionaires. This tax applies to those residing in California as of January 1, 2026.
Hankey calls the tax “ridiculous”. He believes it will drive more wealthy people out of California. The tax aims to raise significant funds for public services. Supporters want to fund healthcare and education programs. They cite looming federal funding cuts. The initiative is gathering signatures for the November 2026 ballot.
Nevada’s Tax Appeal
Nevada offers a stark contrast in tax policy. It has no state income tax. This is a major draw for high-earners. California, by contrast, has the highest state income tax rates in the country. Nevada also lacks corporate income tax. Property taxes are generally lower too. For instance, a household earning $600,000 could save an estimated $70,000 annually in taxes by living in Nevada versus California. This tax-friendly environment makes Nevada a haven for those seeking to reduce their tax burdens.
The Proposed ‘Billionaire Tax Act’
The “2026 Billionaire Tax Act” is a proposed ballot initiative. It would impose a 5% tax on the net worth of billionaires. The tax applies to assets held by California residents on January 1, 2026. This retroactive nature means moving away after that date may not fully exempt individuals. The tax is intended to generate around $100 billion over five years.
However, critics raise concerns about the tax’s complexity. It includes intricate valuation rules for businesses. The tax also targets unrealized gains, which is a point of contention. Some experts suggest the actual tax rate could be higher than 5% due to its design. The state’s Legislative Analyst’s Office predicts potential long-term decreases in state income tax revenues. This raises questions about its ultimate economic impact.
A Wave of Departures
Don Hankey is not alone in his decision. Several high-profile figures have relocated or are considering it. Google co-founders Larry Page and Sergey Brin have been linked to moves to Florida and Nevada. Venture capitalist Chamath Palihapitiya warns of a massive wealth exodus. He estimates California has already lost $1 trillion in wealth. Other notable figures like Larry Ellison and Elon Musk have also left the state. This trend is generating significant news.
Official Reactions and Implications
California Governor Gavin Newsom opposes the proposed tax. He fears it will create a competitive disadvantage for the state. Newsom has called the proposal “damaging” and “bad economics”. He plans to work against its passage. The push for the initiative is largely driven by the Service Employees International Union–United Healthcare Workers West.
The potential departure of billionaires raises concerns about a “brain drain”. It could impact jobs, investment, and the state’s overall economic growth. For Los Angeles, this exodus could mean a loss of vital tax revenue. The spotlight is now on California’s tax policies. They are being scrutinized for their effect on economic vitality and resident retention.
