California’s push for a new billionaire wealth tax is intensifying concerns about the state’s ongoing loss of taxpayers and income, with new IRS figures showing thousands of residents taking billions of dollars elsewhere and billionaire investor Mark Cuban warning that the proposed levy could accelerate the exodus.

Cuban entered the debate Saturday with a warning that the measure could have consequences extending far beyond where wealthy individuals choose to live. He argued that investors could steer their money elsewhere and pressure startup companies to leave California as well.

His comments came during a contentious public exchange with Democratic Rep. Ro Khanna, who has defended the proposed tax. Cuban pushed back strongly against Khanna and said he could direct future investments away from California if voters approve the measure.

The political fight is unfolding as the latest IRS data compiled from federal tax returns indicates that California is already experiencing substantial losses of taxpayers to other states.

Los Angeles County posted the largest net taxpayer loss in the country, with 17,496 more tax filers moving to other states than arriving from them. Those departing taxpayers represented nearly $1.9 billion in income leaving the county.

Several other major California counties recorded significant losses as well. Orange County had a net decline of 11,618 tax filers, while San Diego County lost 9,401. Riverside County recorded a net loss of 8,968 filers, and San Bernardino County lost 8,462.

Such migration can have broader financial consequences for state and local governments because departing residents take taxable income with them, potentially affecting revenues used to support schools, law enforcement, infrastructure and other government services.

The taxpayer migration has become a central backdrop to the growing battle over California’s proposed billionaire tax and whether imposing additional taxes on the state’s wealthiest residents could encourage even more capital to move elsewhere.

The ballot measure, which is supported by the Service Employees International Union, would establish a one-time 5% wealth tax on California residents whose net worth exceeds $1 billion.

California voters are set to decide the proposal in November. Under the initiative, the tax would apply retroactively to people who were California residents as of Jan. 1, 2026.

Backers of the measure contend that it could raise billions of dollars that could be directed toward healthcare and education. Opponents argue that the proposal risks encouraging billionaires, businesses and investment capital to abandon California for states with lower tax burdens.

Cuban has argued that the potential ramifications extend beyond whether individual billionaires relocate. He said the tax could affect his own decisions about where to invest and where the companies receiving those investments should operate.

“If this passes, and it doesn’t directly impact me at all, I won’t be a Cali resident, but you can bet if I’m investing in a multi billion dollar startup, I’m asking them to move from California first,” Cuban wrote.

Cuban then delivered an even more pointed warning to entrepreneurs considering whether to remain in the state.

“IMO, if this passes, only idiot startup founders stay in Cali.”

{Matzav.com}