California’s Billionaire Tax Almost Drove Out Zuckerberg. Meta Cut a Deal to Keep Him.
Mark Zuckerberg told Meta’s board he was prepared to leave California if voters approve Proposition 40 next month. The measure would hit residents worth over $1 billion as of January 1, 2026 with a one-time 5 percent tax on their net worth.
Most of the proceeds would go to healthcare programs. For Zuckerberg, whose fortune sits near a quarter of a trillion dollars and is almost entirely tied up in Meta stock, that means a multi-billion-dollar bill and the need to sell voting shares just to pay it.
Meta’s response was immediate. The company created a new class of non-voting shares that Zuckerberg can sell for cash without diluting his control of the firm. In return he has committed to stay in California—or wherever Meta keeps its headquarters—for eight years while he remains in a full-time leadership role. The filing makes clear that the board viewed his continued presence near headquarters as critical to the company.
This is not an isolated case. Google co-founders Larry Page and Sergey Brin have already left. So have Peter Thiel and several other high-profile billionaires. Analyses from the Hoover Institution and others show that roughly 30 percent of the potential tax base has already departed or signaled an exit, shrinking projected revenues and permanently reducing California’s income-tax collections. Progressive estimates still claim the tax will raise around $100 billion. More realistic models that account for flight put the net fiscal impact near zero or negative once lost future taxes are included.
Proposition 40 was written with a retroactive residency date precisely to trap people before they could move. That design has not stopped the outflow. Instead it has forced companies like Meta to invent special share classes and residency clauses just to retain their founders.
California already has one of the highest top income-tax rates in the country, a massive regulatory burden, and a long list of policy failures in housing, crime, and energy. Adding an unprecedented wealth tax on top of that is accelerating the exit of the people who generate the revenue the state depends on.
The pattern is straightforward. When a jurisdiction decides that a small number of successful people should be treated as a public resource to be seized, those people leave. They take their capital, their companies, their future income-tax payments, and their philanthropy with them.
Meta’s deal keeps one founder in place for now. It does not reverse the broader signal California has sent to every other billionaire and every company considering where to put its next headquarters.