Seven extremely wealthy Californians have already left the state ahead of a proposed 5% billionaire wealth tax that will appear on the November ballot, with four leaving before the Jan. 1 residency deadline and three departing afterward, according to an international tax adviser who said more clients are considering an exit before the vote.

That contrasts with Chamath Palihapitiya's public stance earlier this month. Palihapitiya, a venture capitalist and a vocal critic of the tax, said he will remain in California and "pay the taxes" anyway. Though he called the tax "dumb" last week, he said he "will not leave."

Departures Already Underway

David Lesperance, founder and principal partner of Lesperance & Associates, who advises ultra-high-net-worth founders and venture capitalists, told MarketDash that his clients are taking a different approach. "Four left before Jan. 1, and three more have left since," he said, referring to the Jan. 1, 2026 residency cutoff included in the proposal.

He added, "I am also working with others who are seriously considering leaving before November."

Lesperance did not specify where his own clients relocated. However, the broader trend shows that many are relocating to Florida, which does not have a state income tax.

Four Ways to Sidestep the Tax

Lesperance explained several legal strategies his clients are using, ranking them from the lowest to the highest risk. He said the safest option is to establish non-residency before Jan. 1. "A number of my clients opted for this strategy," he said, adding that it gives them confidence to withstand an audit.

According to Lesperance, a riskier option involves leaving before the November vote itself, betting that courts will strike down the measure's retroactive application to people who were California residents before the law was even approved.

Other clients are funding lobbying efforts against the measure, or working to value their privately held assets in ways that keep their net worth under the $1 billion threshold. A smaller group is preparing to challenge the tax's constitutionality outright if it passes, though Lesperance described that argument as weaker than the retroactivity case.

A 5% Tax With a 30% Bite

In a written analysis shared with MarketDash, Lesperance calculated that the proposed "5%" tax rate could result in a much higher effective tax burden because the measure taxes voting shares rather than equity.

Using Meta (META) CEO Mark Zuckerberg as an example, he noted that Zuckerberg owns about 13% of Meta's equity but controls 60% of its voting shares, meaning the tax would be based on the larger figure.

Using that calculation, Lesperance estimated Zuckerberg's wealth tax bill would be $48 billion. Since paying the bill would require selling shares subject to a combined capital gains rate of 37.1%, he calculated that Zuckerberg would need to sell about $68.8 billion worth of shares, resulting in an effective tax rate of "over 30%, not the advertised 5%."

Zuckerberg's own actions appear to reflect that calculation. In February, he and his wife, Priscilla Chan, reportedly purchased a $150 million to $200 million estate on Indian Creek in Miami as he continues moving his residency away from California.

A Divided Silicon Valley

The first of its kind in the U.S., California's proposed billionaire wealth tax has split Silicon Valley's biggest names. Alphabet Inc. (GOOGL) co-founders Larry Page and Sergey Brin have reportedly moved to cut business ties with the state, while Nvidia (NVDA) CEO Jensen Huang has urged people to stay.

Rep. Ro Khanna, a California Democrat, backs the measure and has publicly defended taxing the ultra-wealthy against critics.

Gov. Gavin Newsom (D-CA) takes the opposite view. Weighing a 2028 presidential run, he opposes the state measure and has instead pitched a national billionaires' tax, writing on Substack, "They did everything right, and the system still has nothing for them."

The measure, which would tax the largest individual fortunes to help fund public health care, food assistance and state budget shortfalls, has already qualified for the November ballot after collecting more than twice the required number of signatures.

Regardless of the outcome, it is expected to face legal challenges over its retroactive provisions.