California entrepreneur Eric Schiffer warned that the state’s proposed billionaire wealth tax could drive some of its most successful business leaders out of California, predicting a “giant sucking sound” of entrepreneurs heading for the exits if voters approve the measure.
uncertain
voters → warn → measure
Schiffer, chairman of family office Patriarch and CEO of Reputation Management Consultants, told FOX Business that he works with several billionaire clients, including some in California, and said many are unhappy about the proposal.
asserted
many → tell → proposal
“I think the impact of this passing in California is a giant sucking sound of all of these entrepreneurs being sucked out of California because they’re just not going to want to stay,” Schiffer said.
asserted
Schiffer → think → California
“Why would anyone stay if they have spent their life building wealth that they were already taxed on?” he continued.
asserted
he → stay → that
“You’re going to see some of the most brilliant, most successful men and women that have been the cornerstone of tax revenue and donational revenue and leading companies that are employing fleets of individuals and scores of individuals, they’re going to say, ‘No mas, I’m out.
asserted
I → go → individuals
Goodbye,’ because they don’t feel respected or appreciated and they feel under attack
asserted
they → feel → attack
,” Schiffer said.
asserted
Schiffer → say → ?
Proposition 40, which is on the Nov. 3 ballot in California, would impose a one-time tax equal to 5% of net worth on billionaires who were California residents on Jan. 1, 2026.
asserted
who → impose → Jan.
The tax would be due in 2027, although payments could be spread over five years at an additional cost.
uncertain
payments → spread → cost
Real estate, pensions and retirement accounts generally would be excluded from the tax.
asserted
estate → exclude → tax
The measure has been endorsed by the California Democratic Party, while some notable leaders, including Gov. Gavin Newsom, have expressed opposition.
asserted
leaders → endorse → opposition
California Republican gubernatorial candidate Steve Hilton has also warned that the billionaire tax would further strain the state’s economy.
asserted
tax → warn → economy
Schiffer argued that the tax could also affect Californians without billion-dollar fortunes, saying the consequences could reach their workplaces and economic opportunities.
“I think some of the consequences, if you’re a working individual in California, is there’s going to be less opportunity,” Schiffer said.
uncertain
Schiffer → argue → California
He argued that if entrepreneurs relocate, the state could lose businesses, jobs, investment and tax revenue.
uncertain
state → argue → businesses
“If you think California, when you have all these billionaires bolt, isn’t gonna hurt and isn’t going to create problems and isn’t going to reduce tax revenue and reduce jobs, boy, you’re smoking some of the stuff that they’re selling in California in some of these stores,” he said.
asserted
he → think → stores
Schiffer also argued that the state could eventually seek to impose similar taxes on people with smaller fortunes.
uncertain
state → argue → fortunes
“If they’re going after billionaires, then the next thing is they’re going after you if you’re worth hundreds of millions of dollars,” he said.
asserted
he → go → dollars
California’s nonpartisan Legislative Analyst’s Office said “some billionaires” may decide to leave the state in response to the tax, taking with them the income tax revenue they currently generate.
uncertain
they → say → revenue
The LAO estimates those and other behavioral responses could reduce state income tax revenue by less than $1 billion per year.
uncertain
those → estimate → year
At the same time, it estimates the wealth tax would temporarily generate tens of billions of dollars over several years.
asserted
tax → estimate → years
FOX Business asked Schiffer directly whether he would leave California if the policy eventually expanded beyond billionaires.
asserted
policy → ask → billionaires
“If it got to the point where they’re talking about people that may be worth more than a couple hundred million dollars in that range, California, unfortunately, would be in my rearview mirror,” Schiffer said.
uncertain
Schiffer → get → mirror
Billionaire Mark Cuban has separately argued that billionaire founders can be “cash poor, stock rich” because much of their net worth can consist of company shares rather than cash available to pay a wealth tax.
asserted
much → argue → tax
Schiffer made a similar point, saying some billionaires hold much of their wealth in stock, including shares of private companies.
asserted
billionaires → make → companies
Rep. Ro Khanna, D-Calif., one of the proponents of the wealth tax, has previously argued that the levy would help preserve health care for working-class Californians.
asserted
levy → argue → Californians
He also said the “Sacramento establishment” and lobbyists opposing the measure were “blatantly out of touch.”
asserted
establishment → say → touch
Schiffer argued that the larger question is what the proposal tells people trying to build companies and accumulate wealth in California.
asserted
proposal → argue → California
“You’re changing the contract that America has sent to entrepreneurs,” he said.
asserted
he → change → entrepreneurs
“And you’re saying, this isn’t a good place to do business.”
asserted
this → say → business
“What we don’t want to ever do is to lose the immense power and immense creative engines that the greatest entrepreneurs in the world continue to generate on behalf of the United States of America,” Schiffer added.
asserted
Schiffer → want → America
The Aporia
