Billionaires are fleeing California from the new tax. Nvidia CEO: I'm staying. The weather is great

California has announced that it will cover health care financial shortfalls by reaching into the pockets of millionaires. After announcing the proposal for a one-off wealth tax of 5%. for those whose fortune exceeds $1 billion, the exodus of the rich from the sunny state has begun. The president of Nvidia Corp. opposed. Jensen Huang, who even encourages you to move to Silicon Valley.

Billionaires are packing up their toys en masse and looking for a new, quiet (i.e. low-cost) haven for themselves and their accounts. Those who have already left California include:

• Google co-founders Sergey Brin and Larry Page
• Peter Thiel announced the opening of the Thiel Capital offices in Miami,
• venture capitalist and current artificial intelligence czar David Sacks is moving to Austin.

In total, it is estimated that about 200 billionaires have already left the state or are actively preparing to do so, Bloomberg reports.

Apparently he doesn't share their concerns Jensen Huang, CEO of Nvidia. As he pointed out during an event at Stanford University,

I tell everyone, 'Move to California. Don't leave. Taxes here are the highest in the world, but that's nothing.” The weather is great.

According to the Bloomberg Billionaires Index, Huang manages an estimated fortune of $152.3 billion. He has already said that he has nothing against new taxes because he himself decided to live in Silicon Valley. “It doesn't bother me at all,” he adds, stating that the state's advantages still outweigh the cost of the tax

Tribute from the rich for health care

The tax is the idea of ​​health care trade unions. They calculated that thanks to this “collection” they would collect about USD 100 billion to cover shortfalls in financing medical care, food benefits and education.

The initiative was met with fierce opposition. In their opinion, this levy will directly hit the innovation economy by taxing both the greatest leaders and beginner founders of start-ups whose wealth is mainly “on paper”. Secondly, it would threaten the tax liquidity of the entire state, whose income is largely dependent on people with the highest incomes, and although it will generate “tens of billions of dollars” of income at once, in the long run it will cost hundreds of billions a year in lost revenues due to the relocation of the rich (approximately 40% of tax revenues come from 1% of California residents).

“Tax the rich!” or not

California is tipping the scales by wanting to create a one-time tax that would capture a significant portion of a billionaire's net worth.

– For billionaire clients in any high tax or income seeking state, this would be a very significant precedent – said Dan Schrauth, wealth advisor at JPMorgan Private Bank in San Francisco, in an interview with Blomberg.

Others, in turn, argue that, apart from the economic harm it brings, a tax in this form is simply unconstitutional

California is not the only one. Rhode Island is currently considering an additional tax for people earning over $640,000. dollars, while some politicians in New York, Washington and Illinois are also pushing for higher taxes on the wealthy.

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