Otherwise, the proposed legislation is intended to target a wide array of financial and intangible assets in ultra-rich portfolios.If passed, the tax is expected to apply to all individuals who are California residents or part-year residents as of January 1, 2026, with the bill calculated based on asset values as of the end of 2026 and due in 2027.Billionaires is expected to have the option to pay the taxes over 5 years, but is expected to also have to pay an additional 7.5% non-deductible tax on the unpaid amount each year.However, it is worth noting that the tax campaign is still in its early stages, as the group must collect almost 900,000 valid signatures to put the issue on the ballot in November.Already, news of the proposed tax has now attracted reactions from tech leaders in Silicon Valley, with some founders and investors considering moving to other states or further cutting their ties to California.Several tech billionaires have already left the state in the past few years, and business leaders are warning that the tax could accelerate this trend and harm the innovation ecosystem that fuels California's tech industry.Thiel himself owns a property in Miami from years ago.

The move signals a significant early financial backing for the campaign against the "2026 Billionaire Tax Act," with other tech leaders also expressing concerns and considering relocation. In 2023, Thiel also told Joe Rogan that he thought real estate prices in Miami were too high.Opponents of the tax have also predicted that more than $75 million could ultimately be spent to defeat the initiative, with Thiel's $3 million cheque serving as an opening contribution in what is likely to become one of 2026's most closely watched economic battles.Apart from Thiel, Google founders Sergey Brin and Larry Page have moved an entity tied to them out of California ahead of a proposed wealth tax on billionaires.

Rob Lapsley, the group's president, has now stated he is actively seeking donors across the state to build corporate and elite support against the tax initiative and other proposals viewed as unfriendly to business.What is California’s proposed billionaire wealth tax and why some Silicon Valley leaders are opposing itUnder the proposed 2026 Billionaire Tax Act, California residents whose net worth exceeds $1 billion is expected to be subject to a one-time 5% tax.

Filings from last month revealed that T-Rex LLC, formed in 2006 and managed from Palo Alto, was converted into a Delaware-based company, T-Rex Holdings. The new filing lists Reno, Nevada, as its principal office, with Brin and Page remaining managers. In December 2025, the venture capitalist contributed to the California Business Roundtable, a Sacramento-based lobbying group that represents large employers and corporate interests.

The donation positions Thiel as one of the earliest and most prominent financiers of an emerging campaign to stop the 2026 Billionaire Tax Act before it reaches voters.A New York Times report cited a public disclosure to claim that the $3 million contribution is the first seven-figure cheque publicly tied to opposition to the billionaire tax proposal.

Big Tech's $70 Billion AI Move: Silicon Valley Bets On India, Snubs Trump's 'America First' Diktat While the money is not formally earmarked only for the wealth-tax fight, the Roundtable is expected to serve as a central vehicle for organising and funding the business community's push to defeat the measure.

Instead of focusing on income, the proposed tax is expected to target assets like privately held companies, stocks, bonds, artwork, collectibles, and intellectual property.Meanwhile, real estate, as well as some retirement plans and pensions, would be exempt. Earlier this month, Larry Page converted his family office into a Delaware entity and incorporated other ventures in Delaware, including those funding influenza research and flying car projects.

Hoffman even revealed that California representative Ro Khanna reached out to him to discuss the proposal and has now made his opposition clear. Hoffman wrote: “One well-documented example is the horrendous idea to tax illiquid stock in the proposal. PayPal co-founder Peter Thiel has now donated $3 million to a California business group leading the fight against a proposed billionaire wealth tax.

This is also Thiel's largest disclosed political gift since the 2022 midterm elections, when he spent more than $35 million backing populist conservative candidates. However, he is still very much part of the Silicon Valley scene through his investments and board memberships, and his donation is a sign that he has now chosen to take on this policy politically rather than just sit back and observe.

TOI Tech Desk’s news coverage spans a wide spectrum across gadget launches, gadget reviews, trends, in-depth analysis, exclusive reports and breaking stories that impact technology and the digital universe. In a post on X (formerly Twitter), Hoffman called the tax “badly designed”, with “massive flaws”, and warned that it could harm innovation.

However, Brin remains connected to various California-based entities, such as the Sergey Brin Family Foundation and Bayshore Global Management, though filings show no other exits linked to him.Meanwhile, LinkedIn founder Reid Hoffman, who was also a part of the PayPal mafia, has now also opposed California's proposed wealth tax.