TechCrunch Industry News Why Silicon Valley is really talking about fleeing California (it’s not the 5%)
Jan 19, 2026
The discussion revolves around a wealth tax proposal targeting founders' voting shares, sparking anxiety in Silicon Valley. A notable example includes Larry Page, highlighting real-world consequences for founders like a SpaceX alumni facing hefty tax liabilities. Experts warn of potential appraisal disputes and penalties for private firms if the proposal passes. Amid bipartisan resistance, there's talk of relocation trends, with high-profile figures like Page and Thiel exploring property outside California. The political landscape surrounding this initiative adds more layers to an already complex situation.
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Tax Hits Voting Power, Not Just Equity
- The proposed California wealth tax targets voting control, not just owned equity, which magnifies tax exposure for founders with dual-class shares.
- That means founders could be taxed on far larger percentages of company value than their actual economic stake.
Real Founder Examples Showing The Stakes
- Larry Page owns about 3% of Google but controls roughly 30% of its voting power, so he'd be taxed on 30% under the proposal.
- A SpaceX alumni founder could face a Series B tax bill that would wipe out his entire holdings, per reporting.
Use Lawyers, Deferrals, And Alternative Valuations
- David Gamage suggests founders can call tax lawyers and use deferral accounts for private stock to delay immediate tax hits.
- He also says founders can submit certified alternative valuations to argue lower taxable amounts.