California’s proposed one-time tax on billionaires, cleared for signature gathering on December 26, 2025, could accelerate a domestic migration trend that has already drained the state’s population for more than two decades. The measure would impose a levy of up to 5% on individuals and trusts holding covered assets valued over $1 billion, and it arrives at a moment when official state demographic data shows persistent net outflows of residents to lower-tax states. For high-net-worth Californians weighing their options, Nevada’s zero state income tax and Las Vegas’s growing infrastructure may look more attractive than ever.
A Billionaire Tax Enters the Arena
The California Secretary of State’s office confirmed that a proposed statewide initiative titled “Imposes One-Time Tax On Certain Individuals And Trusts. Initiative Constitutional Amendment And Statute.” was cleared for signature gathering, as detailed in the official initiative notice carrying Attorney General tracking number 25-0024A1. The measure targets taxpayers and trusts with covered assets valued over $1 billion, imposing a one-time tax of up to 5%. While the term “one-time” suggests a limited scope, the magnitude of the proposed rate on concentrated wealth is enough to reshape financial planning for California’s wealthiest residents and the complex trusts they often use to hold illiquid assets such as private company stock and real estate partnerships.
A major California union is backing the effort, framing it as a way to help offset anticipated Medicaid cuts at the federal level, a rationale described in Associated Press coverage that also notes the initiative’s revenue estimates and procedural hurdles. That reporting highlights sharply divided reactions from state leaders and economists, with supporters arguing the measure fills looming funding gaps while critics warn it could drive capital and entrepreneurial activity out of the state. The proposal must meet a substantial signature threshold within a fixed window to reach the ballot, and even then, voters would be asked to weigh near-term fiscal relief against the risk that California’s most mobile residents decide their future lies elsewhere.
Two Decades of Domestic Outmigration
The proposed tax does not exist in a vacuum. California has experienced negative net domestic migration for more than 20 years, according to the state’s official population estimates produced by the Department of Finance. The E‑6 tables, which track county-level changes from July 1, 2020 through 2025, show explicit domestic outmigration losses for the 2023–2024 and 2024–2025 periods, even as international arrivals and natural increase partially offset those departures. The pattern has persisted across economic cycles and gubernatorial administrations, suggesting that structural factors (housing costs, taxes, business climate, and quality-of-life tradeoffs) have combined to push more residents out than in.
What makes this pattern central to the billionaire tax debate is not just how many people are leaving but which income brackets are most represented in the exits. The Internal Revenue Service’s Statistics of Income program maintains detailed migration files based on year-to-year address changes reported on individual income tax returns, where returns approximate households and exemptions approximate individuals. These data sets, available through the 2021–2022 period, attach adjusted gross income totals to state-to-state and county-to-county flows, allowing analysts to measure how much taxable income moves with departing residents. When high-earner households relocate from California to Nevada, they do not merely change ZIP codes; they remove substantial AGI from California’s tax base, a dynamic that a new billionaire-level levy could amplify rather than offset if it accelerates relocation plans among the ultra-wealthy.
Why Las Vegas Keeps Winning
Nevada’s lack of a state income tax has long made it a magnet for Californians seeking relief from one of the country’s heaviest overall tax burdens. Las Vegas, in particular, offers a combination of lower housing costs, proximity to Southern California, and an expanding professional services ecosystem that appeals to both retirees and working-age transplants. The IRS migration data, built from tax return address changes, consistently shows Clark County as one of the leading destinations for outbound California households, while the California Department of Finance’s E‑6 estimates confirm that net domestic outflows have persisted into 2024 and 2025. For many movers, the calculus is straightforward: a shorter commute to visit friends and family back in California, but a fundamentally different tax and regulatory environment at home…