California’s Wealth Tax Will Murder the Next Apple

The startup ecosystem is already gaming out life after California.

Jason Lemkin, the legendary SaaStr founder, just said the quiet part out loud:

Archived tweet

"If the California wealth tax passes, it will just make sense to leave after the Series B" with @HarryStebbings "It may just make sense. We'll go back to distributed teams after YC. We know how to do this. It's suboptimal, but we know how to do this. We'll adjust." https://t.co/56tQcjlJNb

Jason ✨👾SaaStr.Ai✨ Lemkin @jasonlk January 16, 2026

Leave after Series B. Go distributed. It’s suboptimal, but founders know how to do this. They’ve done remote before, and they’ll do it again—except this time, they won’t be coming back to California.

Archived tweet

Once the mass asset seizures begin, the SF Bay Area will still be where things start, at least for a decade. But they probably won’t be where they stay once things start working. Say goodbye to the next Apple, Google, Nvidia creating hundreds of thousands of jobs in CA https://t.co/LCqwsCDZkA https://t.co/BQLJblmT37 [Quoting @jasonlk]: "If the California wealth tax passes, it will just make sense to leave after the Series B" with @HarryStebbings "It may just make sense. We'll go back to distributed teams after YC. We know how to do this. It's suboptimal, but we know how to do this. We'll adjust." https://t.co/56tQcjlJNb

Garry Tan @garrytan January 17, 2026

This isn’t hyperbole. The math is brutal: the top 1% of California taxpayers pay 46% of state taxes. The top 5% pay 66%. What happens when you threaten to seize their assets? They leave. And according to David Friedberg, 80-90% of affected billionaires have already left California in 2025 or plan to leave in 2026 if the ballot measure looks likely to pass. That’s an estimated $2-2.5 trillion in assets walking out the door—representing roughly $20 billion in annual state revenue.

The 2026 Billionaire Tax Act would impose a one-time 5% tax on net worth exceeding $1 billion, based on residency as of January 1, 2026. But here’s what Sacramento doesn’t understand: founders don’t have liquid billions. They have paper wealth in companies they’re still building. This tax would effectively force them to sell shares or leave. They’ll leave.

Mike Solana at Pirate Wires just spoke with 21 billionaires about their plans. The verdict? They’re fighting back, but they’re also making exit plans. Meanwhile, founders who aren’t yet billionaires—the ones building the next generation of tech giants—are getting the message loud and clear: build your company somewhere else.

Every serious founder in California is now concluding they’ll have to leave eventually. One founder just canceled plans for a second factory in California—hundreds of manufacturing and engineering jobs that will now go to another state.

Say goodbye to the next Apple. The next Google. The next Nvidia. California politicians created an environment where tech and innovation isn’t welcome. They’re about to find out what “less of it” really looks like.

Follow @garrytan for more.