Economist Peter Schiff has warned that California faces a “mass exodus” of ultra-wealthy entrepreneurs, including Meta Platforms Inc. (NASDAQ:META) CEO Mark Zuckerberg, if voters pass a proposed 5% billionaire wealth tax.
Deconstructing the warning, Schiff highlighted the hidden danger of taxing unrealized asset valuations, which he claims will trigger severe capital flight and permanently erode the state’s tax base.
The Wealth Confiscation Trap
The proposed ballot measure applies a 5% tax on net worth exceeding $1.1 billion. Schiff detailed the logistical catastrophe using Zuckerberg, whose $220 billion fortune is mostly tied up in Meta stock.
To cover the annual wealth tax, Zuckerberg would be forced to dump billions in shares onto the open market, unlocking heavy federal and state capital gains liabilities in the process.
