Zuckerberg warns he may leave California if voters pass billionaire tax

OAKLAND, Calif. - Meta CEO Mark Zuckerberg has warned his company that he may flee California if voters choose to adopt a billionaire tax.

The company said Zuckerberg had been granted a financial incentive to stay in California and continue leading the company for the next eight years, despite the risk of a "significant, multi-billion dollar tax payment."

Where the money flows

By the numbers:

Zuckerberg’s net worth is estimated to be approximately $240 billion.

Proposition 40, if passed, would enact a one-time 5% levy on taxpayers and trusts with assets valued at over $1 billion. For Zuckerberg, that would mean paying roughly $12 billion. The taxed funds would go largely toward health care — 90% — and the rest would be spent on education, food assistance, and administering the wealth tax.

The tax would apply to an estimated 200 Californians, and is projected to raise roughly $100 billion over five years.

Meta's plan

What they're saying:

Meta’s plan, as laid out in a regulatory filing, is to create a new class of share that would allow Zuckerberg to sell up to half of his economic stake in the company without giving up the voting control granted by owning the controlling share of its stock.

"Zuckerberg informed the Special Committee that he was evaluating relocating his primary residence outside California and that steps toward any such relocation, including any listing of his residential real estate on the market, would be public and inevitably noted and commented upon by Company employees and, accordingly, raise questions for management of the company going forward," the filing to the Securities and Exchange Commission reads.

Zuckerberg’s continued leadership of the company he founded is "critical" to its success, as Meta continues to invest in AI.

Meta has agreed to gradually lift restrictions on Zuckerberg’s ability to sell certain shares over eight years, on the condition he continues to lead the company and continue to reside near its headquarters.

"The goal is to keep Mr. Zuckerberg continuing to lead the company from California and in close proximity to Meta Superintelligence Labs," the company’s SEC filing states.

Pros and cons

Local perspective:

Proposition 40 has proven divisive, and has drawn support and opposition from a range of stakeholders.

Senator Bernie Sanders has voiced support for the tax, as have the ACLU of California, the California Federation of Labor Unions, AFL-CIO, the National Union of Healthcare Workers and the California Federation of Teachers.

"From 2019 to 2025, California billionaires’ wealth grew an average of over 15% per year, while they paid, on average, just .26% of their wealth annually in state income taxes," Emmanuel Saez, an economist at the University of California Berkeley, and Gabriel Zucman, an economist at the Paris School of Economics said in an interview. "Their income tax payments accounted for only 2.4% of California’s income tax revenue."

The coalition opposing the bill includes Governor Gavin Newsom, gubernatorial candidates Xavier Becerra and Steve Hilton, the California Republican Party, the San Francisco Democratic Party, the California Police Chiefs Association, the California Teachers Association, and PayPal CEO Peter Thiel, whose net worth is approximately $37 billion.

Newsom has said his opposition to the bill is rooted in the idea that the issue of a wealth tax should be handled on a national level, not by individual states, and that California’s economy will suffer if Zuckerberg and other billionaires flee the state.

"...The fight to make the wealthiest Americans pay more in taxes is not one we would be fighting state by state., You may not be able to pick up and move to Texas or Florida to shelter your income from taxation, but I promise you that billionaires can, and do," Newsom said in a statement. "Wealth is movable, and it shops for the state with the lowest taxes. The fight belongs at the federal level, where this broken system was created in the first place."

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