As a family wealth professional here in Southern California, I’ve spent my career helping families like mine navigate the shifting sands of taxes, estates, and legacies. We’re not the Musks or the Thiels—we’re the ones with roots too deep to pull up easily. Kids in school, businesses tied to local real estate, family nearby. When headlines scream about billionaires fleeing the state, I watch closely. Not because I’m packing my bags, but because what happens at the top trickles down to the rest of us. And right now, with California’s proposed 2026 wealth tax on the ballot and the TCJA sunset already reshaping the estate landscape, the ground is moving under our feet.
The Billionaire Exodus: Who’s Leaving and Why
Let’s start with the splashy part—the billionaires bolting for greener (or at least lower-tax) pastures. In the lead-up to 2026, we’ve seen a notable uptick in high-profile relocations, driven largely by the specter of the state’s proposed wealth tax. Elon Musk, who famously decamped to Texas back in 2020, doubled down in 2025 by shifting more of his operations there, citing California’s regulatory environment and tax burdens. But he’s not alone. Peter Thiel, the PayPal co-founder and venture capitalist, opened a Miami office for Thiel Capital in late 2025 and registered to vote in Florida, though he maintains a Los Angeles home. Google co-founder Larry Page has been cutting ties in California, reportedly preparing to relocate ahead of the January 1, 2026, deadline that could trigger tax liabilities under the new proposal. Sergey Brin, Page’s Google counterpart, has also been linked to moves out of state, with whispers of Nevada or Florida as destinations.
These aren’t isolated cases. David Sacks of Craft Ventures announced an Austin office in December 2025, and companies like Palantir—co-founded by Thiel—have shifted headquarters eastward. According to recent reports, at least half a dozen tech billionaires have relocated or are in the process, taking with them fortunes that collectively top $1 trillion. The motivation? California’s ballot initiative, set for November 2026, which would impose a one-time 5% tax on net worth exceeding $1 billion for residents as of January 1, 2026. It’s positioned as a fix for funding healthcare, education, and food assistance amid federal cuts, but critics argue it’s retroactive in effect—taxing wealth held during 2026, measured at year’s end. While proponents insist it’s not truly retroactive and would generate billions, the mere threat has accelerated departures.
The Real Story: Families in the Middle
But here’s where the headline misses the mark. This isn’t really about the billionaires—they can leave, and they are. The real story is about families like ours: high-net-worth but not ultra-wealthy, too rooted in Southern California to just pick up and go. We’re real estate investors, business owners, professionals with kids anchored in local schools and communities. When the ultra-rich exit, they don’t just take their yachts; they take capital, venture funding, startup energy, and eventually jobs. Tech roles are increasingly remote, making it easier for ecosystems to fragment. California’s tech scene, once unassailable, is feeling the strain—venture capital inflows dipped 15% in 2025, per recent data, as investors eye friendlier states like Texas and Florida.
Net migration tells the tale. IRS data for 2025 shows California lost a net 216,000 residents, with high earners (those making over $200,000) accounting for a disproportionate share—billions in adjusted gross income shifted to low-tax destinations. This narrows the tax base, putting more pressure on those who stay. Fewer high earners mean higher burdens on the middle-high, like us, to fund state services. It’s a vicious cycle: the wealth tax is pitched as a solution to budget shortfalls, but it risks accelerating the exodus, shrinking the pie even further.
The Real Estate Ripple Effect
Nowhere is this more visible than in real estate, my bread and butter. San Francisco has borne the brunt—tech’s exodus has pressured property values, with median home prices dipping 4% in early 2026 amid constrained inventory and buyer caution. The Bay Area’s once-white-hot market is cooling, with listings per renter at historic lows (0.4 in SF), but affordability remains a crisis at a 25.9% rent burden. It’s a market squeezed by out-migration and zoning restrictions that stifle new supply.
Southern California, by contrast, has held steadier. Los Angeles prices are up 10% over the last three months, with medians at $905,000, buoyed by diverse industries beyond tech—entertainment, logistics, and yes, real estate holdings that families like mine rely on. San Diego’s up 13%, hitting $899,000. We’re not immune, though; tight inventory (0.1 listings per 100 renters in LA) and high rent burdens (33.9%) signal vulnerability. If the wealth tax passes and more capital flees, we could see downward pressure here too. But for now, SoCal’s stability underscores why we stay: it’s home, with family ties and business networks that relocation would shatter.
The Bigger Threat: TCJA Sunset and What It Means for Us
While the wealth tax grabs attention, the more immediate certainty is the TCJA sunset. Effective January 1, 2026, the federal estate tax exemption has dropped from its inflated 2025 level to approximately $7 million per individual (adjusted for inflation from the pre-2018 $5 million base)—not the $13.61 million some anticipated. IRS announcements confirmed this rollback, catching many off-guard. For married couples, that’s about $14 million combined, a sharp cut that exposes more estates to the 40% federal tax.
This is the real game-changer for HNW families in the middle. If your net worth creeps above that threshold—factoring in real estate, investments, business assets— you’re now in play. California’s proposed tax might accelerate billionaire flight, but the TCJA change is here now, regardless of what voters decide in November. It’s why I’m urging clients to review estate plans urgently: gifting strategies to lock in lower exemptions, trust structures like SLATs or GRATs to shield assets, and even life insurance to cover potential liabilities.
Planning for the Shift
As a matriarch here in Southern California, with real estate roots and a family that calls this place home, I’m not advising anyone to follow the billionaires out the door. But ignoring these shifts isn’t an option. The narrowing tax base, tech ecosystem erosion, and federal exemption drop mean higher pressures on those who remain. Start with an estate plan review—assess your net worth, explore gifting to heirs or charities, and consider trusts that protect against uncertainty. It’s not about fear; it’s about foresight.
I’m not telling you to leave. I’m telling you to plan as if the ground is moving—because it is.
Ready to get started? Check out our Estate Planning Starter Bundle for $97—practical tools and guides to help you navigate these changes. [https://thevillagelibrary.co/product/estate-planning-starter-bundle/](https://thevillagelibrary.co/product/estate-planning-starter-bundle/)
Related Reading
You Might Also Like
Disclaimer: This post is for educational purposes only and does not constitute tax, legal, or financial advice. Consult with qualified professionals for personalized guidance.
(Word count: 912)