Billionaires Push Back: Crypto and Tech Elites Warn California of Capital Flight
Leading figures from the cryptocurrency and technology industries are intensifying pressure on California authorities, warning of serious consequences stemming from a proposal to introduce a 5% tax on unrealized gains for billionaires. The initiative, which could be put to a public referendum in 2026, would primarily affect holders of large equity stakes, startup shares, and crypto assets.
Critics argue that the very principle of taxing “paper” profits—without an actual sale of assets or the realization of liquidity—creates an unprecedented risk. For crypto investors and venture entrepreneurs, this would mean paying taxes on highly volatile assets whose value can fluctuate sharply, without generating any cash flow to cover the tax burden. Industry representatives emphasize that such a model is particularly dangerous for cryptocurrencies, where asset valuations can swing by tens of percent in short periods of time.
Crypto and tech billionaires openly point to the likelihood of large-scale migration of both capital and residents to more favorable jurisdictions, such as Texas, Florida, or international financial centers. For California, home to key Web3, AI, and venture capital ecosystems, this could result not only in a shrinking tax base but also in a weakening of its status as a global innovation hub.
Amid growing competition between regions for technological capital, the proposal has already become one of the most controversial fiscal initiatives in the United States. For the crypto industry, this case is increasingly seen as a test of the limits of acceptable government intervention in the digital asset economy—with potential consequences that could extend far beyond a single state.
