Two States, Two Visions: California Wants To Add A Wealth Tax; Florida Wants To Remove One

Authored by Siri Terjesen & Michael Ryall via The Epoch Times,

While Sacramento legislators debate how to extract more money from residents who are already leaving, Tallahassee legislators are moving in the opposite direction. The fiscal philosophies now playing out in California and Florida represent the starkest tax policy divergence in modern American history—and the numbers tell the story.

In California, there is a $12 billion budget deficit, the product of spending commitments that expanded faster than the revenue base meant to fund them. The legislative response, rather than spending restraint, has been a parade of wealth tax proposals. The latest—Initiative 25-0024, the 2026 Billionaire Tax Act—would impose a one-time 5 percent excise tax on the net worth of California residents exceeding $1 billion as of Jan. 1, 2026. Applied to the state’s approximately 200 billionaires, the measure is projected to raise roughly $100 billion, with 90 percent directed to Medi-Cal.

The details deserve scrutiny. The tax is retroactive: Liability attaches as of Jan. 1, 2026, but the measure cannot be enacted until after a November 2026 election, meaning the law would penalize conduct before the law formally exists. Legal analysts have identified constitutional vulnerabilities on due process, the Dormant Commerce Clause, and uniformity—making the measure’s survival uncertain. More practically, the California Legislative Analyst’s Office has warned that if even a fraction of targeted billionaires depart, the income tax revenue they currently pay disappears with them. The top 1 percent of California taxpayers already account for more than 40 percent of state personal income tax receipts. The margin for error is thin.

This is not California’s first attempt. Assembly Bills 259, 2289, 310, and 2088—all wealth tax proposals—have been introduced and abandoned in the past five years. One proposed exit provision would have continued taxing departing residents for up to 10 years after leaving. The structure prompted one legal commentator to invoke the lyric from “Hotel California”: you can check out anytime you like, but you can never leave—fiscally speaking.

The market is responding. Google co-founder Larry Page has reportedly registered Florida LLCs and many other billionaire tech founder CEOs are exploring a move outside California, including Peter Thiel, Sergey Brin, and Mark Zuckerberg. These are rational responses to a state signaling that accumulated wealth is a resource to be liquidated before its owners can move it elsewhere.

Now consider Florida, in which the policy signals are vastly different. The state already has no income tax—a structural advantage that has driven a decade of net migration from high-tax states. Governor Ron DeSantis is now pushing further: a constitutional amendment on the November 2026 ballot that would eliminate property taxes on homesteaded primary residences. The Florida House passed HJR 203 on Feb. 19, 2025, by an 80–30 party-line vote. If the Senate concurs and 60 percent of voters approve, Florida would become the first state in American history with neither an income tax nor property taxes on primary residences.

The fiscal challenge is real. Property taxes generate roughly $55 billion annually in Florida, funding significant county and municipal services. Critics argue that eliminating them would necessitate either dramatic service cuts or offsetting revenue increases—potentially raising the state sales tax from 6 percent toward 12 percent. Governor DeSantis disputes this, pointing to budget surpluses and government waste that can be redirected. That debate will play out in Tallahassee and at the ballot box.

But the directional signal is unmistakable. California responds to budget pressure by widening the net it casts on wealth. Florida responds by asking whether the net needs to exist at all.

The migration data confirm which model high earners find more credible—and reveal the fiscal irony California is engineering for itself. IRS data show that over the past decade, California has lost $14.5 billion in tax revenue to interstate migration, while Florida has gained $4.1 billion. Goldman Sachs Research, analyzing IRS filings from 2017 to 2023, found that 4 percent of households with more than $1 million in adjusted gross income changed states during that period, with large outflows from California and substantial inflows to Florida—a trend that was still accelerating in 2022 and 2023. Goldman Sachs estimates that tax-driven emigration has already reduced California’s tax revenue by up to 3 percent. U-Haul’s 2025 Growth Index ranked California the top outbound state for the second consecutive year and Florida the second-best inbound (behind Texas).

Every high-income household that relocates from Sacramento to South Florida takes its future income tax payments—and its business payroll—with it. California’s proposed billionaire tax may be designed to prevent that exit; the evidence suggests it will accelerate it instead.