California entrepreneur Eric Schiffer warned that California’s proposed billionaire wealth tax could drive business leaders out of the state if voters approve the measure.
Schiffer, chairman of family office Patriarch and CEO of Reputation Management Consultants, said he works with several billionaire clients, including some in California, who are unhappy about the proposal, Fox Business reported Friday.
Business Exit Warning
“I think the impact of this passing in California is a giant sucking sound of all of these entrepreneurs being sucked out of California because they’re just not going to want to stay,” Schiffer said.
Proposition 40 would impose a one-time tax equal to 5% of net worth on billionaires who were California residents on Jan. 1, 2026. The tax would be due in 2027, with payments allowed over five years at an additional cost. Real estate, pensions and retirement accounts generally would be excluded.
Tax Revenue Impact
The proposal comes as some wealthy Californians consider how they would respond if it passes. International tax adviser David Lesperance said seven extremely wealthy Californians had already left the state, while other clients were considering moving before the November vote. Those claims could not be independently verified.
California’s nonpartisan Legislative Analyst’s Office, meanwhile, said some billionaires may leave in response to the tax, reducing state income-tax revenue by less than $1 billion annually. The LAO estimates the wealth tax would temporarily generate tens of billions of dollars over several years.
“If you think California, when you have all these billionaires bolt, isn’t gonna hurt and isn’t going to create problems and isn’t going to reduce tax revenue and reduce jobs, boy, you’re smoking some of the stuff that they’re selling in California in some of these stores,” Schiffer said.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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