Spiro Warns Newsom: Billionaire Wealth Tax Will Spark Capital Exodus
California’s billionaire wealth tax battle escalated this week after celebrity attorney Alex Spiro urged Gov. Gavin Newsom to kill the proposal, warning wealthy clients would flee the state if it passes. According to Business Insider, Spiro’s Dec. 11 letter frames the tax as an existential risk to California’s economy.
The proposed Billionaire Tax Act would impose a one-time 5% tax on residents with more than $1 billion in assets, and if it qualifies for the November 2026 ballot, the levy would apply retroactively to Jan. 1, 2026. That retroactive provision has heightened anxiety among the ultra-wealthy and their advisors.
Spiro’s letter says the tax “will trigger an exodus of capital and innovation from California,” noting unnamed clients have made clear they will permanently relocate if subjected to the levy.
The warning comes as business leaders and investors publicly oppose the measure, while supporters insist it will raise critical revenue. Opponents argue that forcing billionaires to liquidate assets or move out will harm jobs and long-term investment.
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“Our clients have made it clear they will permanently relocate if subjected to this tax,” Spiro wrote in the letter obtained by Business Insider.
For Gov. Newsom, who has voiced opposition to state-level wealth taxes, the letter adds pressure amid conflicting political and fiscal pressures. If the measure qualifies for the ballot, Newsom would not have veto power, leaving voters to decide.
Supporters say the tax could generate billions for health care and services, but critics worry about capital flight and erosion of California’s economic base.
Campaigns must now gather nearly 870,000 signatures to qualify for the ballot. If successful, the issue will be one of the most consequential fiscal debates in California’s 2026 election cycle.
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