California's Billionaire Tax Test: Founders Weigh Exit vs. Staying

California voters will decide a statewide billionaire tax in November. The measure targets startup founders who hold stock worth billions but lack the cash to pay the bill. Mark Cuban warned the tax would drive them out. "If this passes, only idiot startup founders stay," Cuban wrote on X.

Cuban later clarified the tax would not hit every founder. He pointed to competing states. "Cali isn't the only place with a nice climate," he told Business Insider.

Business Insider asked three founders whether they would leave.

Jesse Tinsley, founder of Mainstreet.com, said he would. "It's every CEO or founder over a billion dollars in net worth minus a handful," he wrote. Tinsley cited the Laffer curve, arguing revenue falls to zero as the rate climbs past a peak. If he moved, he said, he would head to Florida. "If I was moving there permanently, I would get a home in Miami/Palm Beach area."

Jaspar Carmichael-Jack, cofounder of AI startup Artisan, said he would "seriously consider leaving California in the medium term." He moved from the UK to San Francisco to build his company. "It's a direct hit to illiquid founders, and it makes it harder to justify staying when other states are actively competing for startups," Carmichael-Jack wrote.

Michal Cieplinski, founder of HiJenny, wrote that founders "are not going anywhere" while the Bay Area remains central to AI engineering. "The wealth tax mostly affects founders of public or large private companies and they, on their own, can move. The companies and most of their employees will remain."

Nvidia CEO Jensen Huang offered a different take in January. "We chose to live in Silicon Valley, and whatever taxes they would like to apply, so be it," Huang said.

The ballot measure is set for November. The outcome will test whether Cuban's warning was right.