Executives in the cryptocurrency industry oppose California's proposed 5% billionaire wealth tax legislation

The proposed "Billionaire Tax Bill" in California has sparked strong opposition from several figures in the cryptocurrency industry. The proposal aims to impose a 5% wealth tax on individuals with a net worth exceeding $1 billion, to fund the healthcare system and state aid programs. Industry insiders believe that this policy could lead to an outflow of entrepreneurs and capital, negatively impacting the local innovation ecosystem.

Bitwise CEO Hunter Horsley and Kraken co-founder Jesse Powell pointed out that the wealth tax is partially based on unrealized gains, which may force taxpayers to sell shares or business assets to raise funds. Powell stated on the X platform that this measure could become the "last straw" that drives billionaires out of California, with related spending, jobs, and charitable activities potentially shifting elsewhere.

Nic Carter, founding partner of Castle Island Ventures, and Jeff Park, Chief Investment Officer of ProCap BTC, also believe that in a context of highly mobile capital, a one-time wealth tax could signal the market for future further taxation. Meanwhile, Fredrik Haga, co-founder of Dune, cited Norway as an example, stating that similar tax systems have led to the migration of high-net-worth individuals, with actual tax revenue outcomes falling short of expectations.

Supporters of the proposal include Ro Khanna, a representative from California's 17th congressional district, who believes that the tax revenue will be used to improve childcare, housing, and educational conditions, thereby benefiting innovation in the U.S. However, opponents have pointed out that California's audit reports have revealed issues with the efficiency of public fund usage, questioning whether the new tax revenue can truly be used for its intended purposes.