Cryptocurrency giants criticize California's proposed 5% wealth tax

On December 29, Cointelegraph reported that California proposed a 5% tax on the wealth of billionaires, a proposal that has been met with strong opposition from cryptocurrency executives. They argue that this would trigger an outflow of entrepreneurs and capital flight, and that the money would be wasted regardless.

The proposal, titled the "Billionaire Tax Act of 2026," aims to add a voting option to tax individuals or entities with a net worth exceeding $1 billion at 5% to fund healthcare systems and state aid programs. According to the SEIU (United Western Healthcare Workers Union), because the proposed wealth tax partially targets unrealized gains, some billionaires may need to sell stocks or parts of their businesses to raise funds to pay the tax. The tax can be paid in a lump sum or over five years with interest.

Cryptocurrency industry veterans, including Bitwise CEO Hunter Horsley and Kraken co-founder Jesse Powell, believe the measure will only lead to billionaires leaving the state, thus having a negative impact.