\n From left: Jackson Square Capital’s Andrew Graham, Falcon Wealth Planning’s Gabriel Shahin, Sax Wealth Advisor’s William Connor\n <\/p>\n
\n Home to more state-registered RIA than any other state, some advisors in California are drafting exit plans after the latest 5 percent tax proposal on billionaires.\n <\/p>\n
Some registered investment advisors in California are crafting exit plans from the state amid a proposed 5% wealth tax on billionaire residents.<\/p>\n
The Service Employees International Union-United Healthcare Workers West has proposed the tax to fund the California healthcare system, and it’s hoping to gather enough signatures to move to the voting ballot in November. California is home to over 2,600 state-registered RIAs<\/a>, the most state-registered advisors of any state.\u00a0<\/p>\n \u201cNearly everybody has an exit plan, including me. And it’s not just the tax … there’s one party in the state,\u201d said Andrew Graham, founder of the San Francisco-based RIA Jackson Square Capital. \u201cWe do have clients that are billionaires, but billionaires on paper. So their private investments are worth a billion dollars, and the conversation with those clients is more, we have a plan B.\u201d<\/p>\n Google co-founders Larry Page and Sergey Brin made several recent moves<\/a> to reduce their ties to the state where they made their fortunes. The tax proposal\u2019s consideration to include illiquid assets<\/a> in its definition of whose wealth reaches billionaire status could deplete the Silicon Valley tech startup ecosystem where wealth is concentrated in company shares for many executives.\u00a0<\/p>\n \u201cYou think of entrepreneurs or people at startups, we have clients who are unicorns but they just don’t have liquidity to pay that tax. California’s not the place to do a startup is the message that you send,\u201d said Graham. \u201cThe topic has only come up in sort of eye rolling conversations with clients like this is the most recent iteration of of California’s economic suicide.\u201d<\/p>\n \u201cNo venture capital<\/a> firm wants to invest in a company in California that if it hits a unicorn status at a billion dollar valuation, they’re forced to sell shares because their CEO now is considered a billionaire. That’s silly and an unnecessary tender offer,\u201d said Gabriel Shahin, founder of Falcon Wealth Planning headquartered in southern California. \u201cThe exodus of small-cap tech companies that would leave the state, that’s a concern that our people are having.\u201d\u00a0<\/p>\n Shahin says he\u2019s \u201clooking to restructure my company in Delaware as we speak,\u201d noting about 60% of Falcon Wealth\u2019s clients live in California. Graham and Shahin mentioned Florida, Texas (Houston), Arizona, Washington (Seattle), and Montana as places that their California clients are considering relocating to.<\/p>\n For both advisors, even if the vast majority of their clients are not billionaires, the proposed tax increase leaves a bad taste given their mistrust in California’s local government. Graham for example pointed to San Francisco\u2019s attempt to build a public toilet for $1.7 million<\/a>, while Shahin has many clients whose homes were destroyed in last year\u2019s southern California wildfires<\/a>, but encountered bureaucracy preventing people from trying to rebuild their homes.\u00a0<\/p>\n \u201cIf somebody’s worth $100 billion, taking $1 billion from that person and redistributing it to help with free schooling or to get out of poverty, makes sense. But the bigger compounding issue is now just the absolute waste and fraud that we’re seeing in our local governments,\u201d Shahin said.\u00a0 \u201cIt’s just bad timing when we already feel like our state is wasting money and then of course, the millionaires and some billionaires over in Palisades had their homes burnt down with no infrastructure behind it, even though they’re paying all the taxes and so on.\u201d<\/p>\n California had the highest state income tax in 2025 at 13.3%, followed by Hawaii at 11%, and New York at 10.9%. William Connor, partner at the New Jersey-based RIA Sax Wealth Advisors<\/a>, compared the current California billionaire tax proposal to neighboring Washington state\u2019s decision in 2022 to enact a 7% tax on capital gains.<\/p>\n That legislation prompted large RIAs like Fisher Investments<\/a> to relocate its headquarters from Washington to Texas. Amazon founder Jeff Bezos moved from Washington to Florida in 2023 to save over $600 million<\/a> on his sale of shares in Amazon stock.\u00a0<\/p>\n \u201cBezos basically paused his selling of Amazon stock, which he had done consistently for two decades. Once he had a Florida residence, he started reselling,\u201d said Connor. \u201cA lot of times the revenue that’s expected from these tax moves doesn’t materialize because people aren’t static instruments. You’ve seen that a consistent way for people to shift their domicile is based on these taxes.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"From left: Jackson Square Capital’s Andrew Graham, Falcon Wealth Planning’s Gabriel Shahin, Sax Wealth Advisor’s William Connor Home…\n","protected":false},"author":2,"featured_media":142555,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[7,9,8],"class_list":{"0":"post-142554","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-california","8":"tag-california","9":"tag-california-headlines","10":"tag-california-news"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/142554","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=142554"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/142554\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/142555"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=142554"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=142554"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=142554"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}