Billionaires are leaving California and heading to Nevada to escape a proposed wealth tax that could cost them hundreds of millions of dollars, Business Insider reported.
The Billionaire Tax Act, expected to appear on the Golden State's November ballot, would impose a one-time 5% charge on the total assets of any resident whose net worth tops $1 billion. If voters approve it, the law would apply retroactively to anyone who lived in California as of Jan. 1.
That deadline prompted some of the state's richest people to move fast. Don Hankey, chairman of Hankey Group and a Californian, closed on a $21 million penthouse near Las Vegas at the start of January. His estimated fortune sits at $8.2 billion. The proposed tax would cost him roughly $410 million.
Nevada's draw is straightforward. The Silver State doesn't collect income tax, and its property tax rate is low, much like Florida's. Las Vegas is under two hours by plane from Los Angeles and San Francisco, which makes it an easy swap for people who want to stay on the West Coast.
The money moving into Nevada is reshaping its housing market. Households worth $1 million or more in greater Las Vegas climbed from 331 in 2019 to 879 in 2023. Real estate agent Ivan Sher told Business Insider that about 25% of his buyers used to come from California; once the pandemic hit, the share jumped to 80%.
For you, this trend has a flip side. As luxury homes and high-end developments spread across the desert, they put more strain on a water supply that is already running low. The Colorado River, which feeds much of Southern Nevada, has been shrinking for years.
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Each new megamansion with a pool and landscaped yard pulls from that same dwindling source. California, on its end, stands to miss out on billions of dollars in tax dollars that could go toward public programs and environmental protections.
"I just felt a little bit like I wasn't wanted," Hankey told Forbes of his choice to leave California, via Business Insider.
Zain Aziz, who founded the technology company Atom, relocated to Henderson, Nevada, last year. "This will become the hub for the wealthiest," Aziz said. "The city wants that."
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