California’s New Billionaire Tax Is Pushing the Ultra Wealthy to Quietly Relocate and These Are the States Benefiting Most
High-income Americans have been moving between low-tax and high-tax states for years, according to IRS migration data and census estimates. In California, that debate sharpened again in 2024 as lawmakers revisited a wealth-tax proposal aimed at the richest residents and advisers reported renewed interest in out-of-state moves.
California’s proposal revived a familiar tax fight
California lawmakers have floated several versions of a wealth-tax plan in recent years, including Assembly Constitutional Amendment 3 and Assembly Bill 259, both introduced in 2024 by Assemblymember Alex Lee of San Jose. The proposal would apply a 1 percent annual tax on net worth above $50 million and a 1.5 percent rate above $1 billion, according to the bill text.
The proposal did not become law in 2024, and California has not enacted a statewide billionaire tax. Still, the bill drew national attention because it also contemplated taxing some former residents for a limited period after leaving the state, according to the legislative language introduced on April 15, 2024.
Tax lawyers told outlets including Bloomberg and CNBC in 2024 that wealthy clients were again asking about residency rules, trusts and exit timing. That interest is measurable only in part, because California does not publish a live count of billionaires who changed domicile after the bill was introduced.
Florida, Texas and Nevada keep showing up in the data
The states most often cited by advisers and migration researchers are Florida, Texas and Nevada, largely because all three impose no state income tax. IRS state-to-state migration files and U.S. Census Bureau estimates have repeatedly shown net inflows into those states from higher-tax places including California and New York.
Florida has been a particular draw for finance and tech executives, especially in Miami-Dade and Palm Beach counties, where luxury home sales stayed active through 2024, according to local brokerage reports and county market data. Texas, especially Austin and the Dallas-Fort Worth area, has also attracted founders and investors, while Nevada remains a common choice for residents wanting to stay close to Los Angeles or the Bay Area.
What is not yet known is how many of those moves were tied specifically to California’s 2024 wealth-tax proposal rather than broader tax planning. California has not released any official list of billionaires who left over the debate, and residency changes are often private unless they surface in court records or securities filings.
Why the relocation talk matters beyond billionaires
The main driver is simple: taxes can change the math on where very wealthy people choose to live, especially when their assets are worth hundreds of millions or billions of dollars. Analysts at the Tax Foundation and attorneys who advise high-net-worth families have said state income taxes, estate planning and residency audits all factor into those decisions, not just one proposed bill.
California still offers advantages that keep many wealthy residents in place, including Silicon Valley deal flow, Los Angeles media networks and access to major venture firms on Sand Hill Road. But the wealth-tax debate added another layer to an already expensive picture that includes the nation’s top state income tax rate of 13.3 percent, according to the California Franchise Tax Board.
For most residents, the immediate impact is political and economic rather than personal. The proposal remains a policy fight in Sacramento, while Florida, Texas and Nevada continue benefiting from broader migration trends that long predate 2024, according to IRS and census data.
