If you’ve been following the billionaire exodus from California with some confusion, here’s what’s actually driving the nervousness: it’s not the 5% rate. As highlighted Friday in the New York Post, the proposed wealth tax would hit founders on their voting shares rather than the actual equity they own.
Take Larry Page, who about 3% of Google but controls roughly 30% of its voting power through dual-class stock. Under this proposal, he’d owe taxes on that 30%. For a company valued in the hundreds of billions, that’s a lot more than a rounding error. The Post reports that one SpaceX alumni founder building grid technology would face a tax bill at the Series B stage of the company that would wipe out his entire holdings.
David Gamage, the University of Missouri law professor who helped craft the proposal, thinks Silicon Valley is overreacting. “I don’t understand why the billionaires just aren’t calling good tax lawyers,” he told The San Francisco Standard this week. Gamage insists founders wouldn’t be forced to sell. Those with most of their wealth in private stock could open a deferral account for assets they don’t want taxed immediately — California would instead take 5% whenever those shares are eventually sold. “If your startup fails, you pay nothing,” he explained. “But if your startup is the next Google, you’re giving California a share of your gamble.” He also said founders could submit alternative valuations from certified appraisers reflecting what shares could actually sell for, rather than being stuck with the default voting-control formula.
But that’s pretty small consolation. For startups that aren’t publicly traded, calculating valuations is “inherently difficult,” tax expert Jared Walczak told the Post. “These are not clear cut—you could come to a very different conclusion not because of dishonesty.” And if the state disagrees with your appraisal, it’s not just the company on the hook; the state can also penalize the person who calculated the valuation. Even with alternative appraisals, founders would still face enormous tax bills on control they hold but wealth they haven’t realized.
Now, if you’ve been under a rock: California’s health care union is pushing a ballot initiative for a one-time 5% tax on anyone worth over $1 billion. The union argues it’s necessary to offset the deep cuts to health care that President Trump signed into law last year, including slashes to Medicaid and ACA subsidies. As originally envisioned, they expect to raise about $100 billion from roughly 200 individuals and the tax would apply retroactively to anyone living in California as of January 1, 2026.
But the resistance is fierce and bipartisan. As reported last weekend by the WSJ, Silicon Valley elite have formed a Signal chat called “Save California” that includes everyone from Trump’s crypto czar David Sacks to Kamala Harris mega-donor Chris Larsen. They’ve called the proposal “Communism” and “poorly defined.” Some are taking just-in-case measures, too, with Larry Page reportedly dropping $173.4 million on two Miami waterfront properties across last month and the first week of the new year, and Peter Thiel’s firm leasing Miami office space last month. (Thiel has had ties to Miami for years — including a home — but an uncharacteristic press release about the move was seemingly meant to send a message.)
Even Governor Gavin Newsom is fighting it. “This will be defeated, there’s no question in my mind,” he told the New York Times this week, adding that he’d been “relentlessly working behind the scenes” against the proposal. “I’ll do what I have to do to protect the state.”
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For now, the union isn’t backing down. “We’re simply trying to keep emergency rooms open and save patient lives,” said executive committee member Debru Carthan to the Journal last weekend. “The few who left have shown the world just how outrageously greedy they truly are.”
The proposal needs 875,000 signatures to make November’s ballot, where it would need a simple majority to pass.
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![US cybersecurity agency CISA had to build its incident playbook during the incident, agency reveals | TechCrunch
U.S. federal cybersecurity agency CISA said it did not have a prepared response plan for how it should handle a cybersecurity incident in May, after an investigative reporter notified the agency that a contractor had publicly exposed sensitive keys and credentials for accessing U.S. government systems.
CISA, the Homeland Security unit tasked with defending federal networks and helping to safeguard critical infrastructure, revealed Friday in a postmortem report that its staff “had to spend time building [a playbook] during the early stages of the incident.” The agency said it is important to prepare playbooks for “all anticipated needs” to ensure that organizations are ready to respond in the event of a security incident rather than scrambling to improvise one in real time.
The agency did not say how long the missing playbook delayed CISA’s response, and a spokesperson did not immediately respond to TechCrunch’s request for comment.
Independent cybersecurity journalist Brian Krebs reported in May that a security researcher with cyber firm GitGuardian alerted him to reams of exposed passwords stored in a publicly accessible GitHub repository, which an employee of a CISA contractor had uploaded.
According to Krebs, the researcher tried to alert the contractor but didn’t hear back. Only after Krebs contacted CISA did the agency take the repository offline and revoke and replace all of the exposed credentials to prevent any potential future abuse.
CISA said that no customer or mission data was exposed in the incident and thanked the researcher and reporter for their help. The agency said that its channels for allowing security researchers to notify CISA of potential incidents “were not well defined,” and that it has made changes to make it easier and faster for researchers to contact the agency.
CISA has been without a permanent director since the start of President Donald Trump’s second term in January 2025. The agency has also been affected by cuts, furloughs, and layoffs affecting about a third of its workforce since Trump took office.
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.#cybersecurity #agency #CISA #build #incident #playbook #incident #agency #reveals #TechCrunchCISA,cybersecurity,us government](https://i0.wp.com/techcrunch.com/wp-content/uploads/2026/05/cisa-2240293485.jpg?resize=1200%2C800&ssl=1 "US cybersecurity agency CISA had to build its incident playbook during the incident, agency reveals | TechCrunch
U.S. federal cybersecurity agency CISA said it did not have a prepared response plan for how it should handle a cybersecurity incident in May, after an investigative reporter notified the agency that a contractor had publicly exposed sensitive keys and credentials for accessing U.S. government systems.
CISA, the Homeland Security unit tasked with defending federal networks and helping to safeguard critical infrastructure, revealed Friday in a postmortem report that its staff “had to spend time building [a playbook] during the early stages of the incident.” The agency said it is important to prepare playbooks for “all anticipated needs” to ensure that organizations are ready to respond in the event of a security incident rather than scrambling to improvise one in real time.
The agency did not say how long the missing playbook delayed CISA’s response, and a spokesperson did not immediately respond to TechCrunch’s request for comment.
Independent cybersecurity journalist Brian Krebs reported in May that a security researcher with cyber firm GitGuardian alerted him to reams of exposed passwords stored in a publicly accessible GitHub repository, which an employee of a CISA contractor had uploaded.
According to Krebs, the researcher tried to alert the contractor but didn’t hear back. Only after Krebs contacted CISA did the agency take the repository offline and revoke and replace all of the exposed credentials to prevent any potential future abuse.
CISA said that no customer or mission data was exposed in the incident and thanked the researcher and reporter for their help. The agency said that its channels for allowing security researchers to notify CISA of potential incidents “were not well defined,” and that it has made changes to make it easier and faster for researchers to contact the agency.
CISA has been without a permanent director since the start of President Donald Trump’s second term in January 2025. The agency has also been affected by cuts, furloughs, and layoffs affecting about a third of its workforce since Trump took office.
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.#cybersecurity #agency #CISA #build #incident #playbook #incident #agency #reveals #TechCrunchCISA,cybersecurity,us government")
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