California's 5% wealth tax proposal raises concerns among crypto industry players: billionaires may face "capital flight" dilemma

【BlockBeats】A recent wealth tax proposal in California has caused quite a stir in the crypto industry. The proposal, called the “2026 Billionaire Tax Act,” requires individuals or entities with a net worth exceeding $1 billion to pay a 5% tax, aimed at supplementing the state’s healthcare system and government assistance programs.

The most challenging aspect of this policy is that it targets not only realized gains but also unrealized gains. This means many billionaires might be forced to sell stocks or parts of their businesses to cover the tax. The payment options are relatively flexible — they can pay in one lump sum or over five years with interest.

Once the news broke, prominent figures in the cryptocurrency space immediately voiced opposition. Industry veterans like Bitwise CEO Hunter Horsley and Kraken co-founder Jesse Powell pointed out that such a tax policy would only push the wealthy to leave California, ultimately harming the state government itself. Their logic is straightforward: no one wants to do business in a high-tax environment; rather than being heavily taxed, they might as well relocate to another state.

From an industry perspective, behind this battle over taxation and capital flow lies the eternal contradiction between government revenue needs and entrepreneurs’ profit-seeking nature. For entrepreneurs holding large amounts of unrealized gains, this proposal is undoubtedly a tough dilemma.