When Billionaires Pack Their Bags

Florida Governor Ron DeSantis has a message for states considering wealth taxes: watch what happens when your richest residents decide to leave. His case in point? Amazon.com Inc. (AMZN) founder Jeff Bezos, whose 2023 relocation from Washington state to Florida created what DeSantis calls "a major impact" on Washington's budget.

In a Sunday post on X, DeSantis pointed out that Washington "lost its biggest taxpayer" when Bezos moved to his now-infamous "billionaire bunker" in the exclusive Indian Creek Village community outside Miami. The financial implications weren't small: Bezos's move reportedly helped him dodge $1 billion in taxes. To put that in perspective, Washington state's total annual revenue from 2023 through 2025 comes to $66.39 billion, making this a considerable chunk of change.

The Tax Competition Game

DeSantis's argument is straightforward: states without income taxes have "a major advantage over states that do." This becomes especially relevant as Washington considers implementing a new state income tax targeting millionaire residents. The Florida governor called such policies "counterproductive," warning they create a self-reinforcing cycle of decline.

"Washington has already driven taxpayers out due to bad policies," DeSantis said, predicting that the inevitable result is simple: "taxpayers will flee." He warned that states will keep spending regardless, and what starts as a tax on millionaires eventually expands to hit the broader tax base. "This will further erode the economic base — and the cycle will keep repeating," he concluded.

California's Billionaire Dilemma

Washington isn't alone in testing the limits of wealth taxation. California is pushing forward with its own 2026 Billionaire Tax Act, which would impose a one-time 5% levy on all state residents worth more than $1 billion. The proposal includes stiff penalties for understating wealth and additional measures designed to prevent evasion among California's roughly 200 billionaire residents.

The response from some of those billionaires? Exit plans. Billionaire investor Peter Thiel and Alphabet Inc. (GOOG) co-founder Larry Page are reportedly planning to reduce their ties to California, with Page already eyeing a move to Florida.

The pattern emerging is clear: as states raise taxes on the wealthy, those with the resources to relocate are doing exactly that. Whether this represents sound tax policy or a race to the bottom depends largely on where you're standing, but DeSantis is betting Florida's zero-income-tax stance will continue attracting America's wealthiest residents.