Zuckerberg Says He's Weighing a Move Out of California if Voters Pass Billionaire Wealth Tax

Meta CEO Mark Zuckerberg has told investors he may leave California if voters approve Proposition 40, a billionaire wealth tax on the Nov. 3 ballot. In a Meta regulatory filing, the company said Zuckerberg is "evaluating relocating his primary residence outside California."

Proposition 40 would impose a one-time 5% state tax on billionaire wealth, with the goal of raising $100 billion for California's healthcare system. CBS News MoneyWatch estimated it would cost Zuckerberg about $12.4 billion of his $247 billion net worth, according to the Bloomberg Billionaires Index.

The filing said any listing of his California property would be public and would raise questions for company management. Meta said Zuckerberg's presence near its Menlo Park headquarters is "critically important" to the company.

To prepare for a possible tax bill, Meta's board approved a new class of nonvoting common stock that Zuckerberg can sell to pay it. Without it, he might have had to sell voting shares, which would have reduced his control of the company. In exchange for the change, Zuckerberg committed to remaining a California resident for eight years. If Meta moves its headquarters to another state, he will move with it.

The nonvoting Class C shares will be publicly listed and take effect in January. Meta says they will help fund AI infrastructure and could also be used for employee compensation, acquisitions and general corporate purposes. Andrew Rocco, a stock strategist at Zacks Investment Research, said: "Meta plans to issue nonvoting shares to fund AI investments without diluting CEO Mark Zuckerberg's control."

Economists at Stanford University have questioned whether the tax could backfire. Several billionaires have already left the state, they noted, which could lower projected wealth tax revenue and reduce overall income tax collections.

The stock change and the residency pledge together show how Meta is trying to manage the risk on both sides. The nonvoting shares give Zuckerberg a way to raise cash without giving up control, while the eight-year commitment is meant to reassure the company that its founder will stay close to its Menlo Park base unless the headquarters itself moves. The filing's warning that a public property listing would raise questions for management suggests the company expects any decision to be scrutinized.

The filing turns a ballot measure that supporters frame as a way to fund healthcare into a test of how mobile the very wealthy are. Backers argue that billionaires can afford a one-time payment. Opponents argue that the state's income tax base depends on a small number of high earners, and that departures would leave the state worse off.

Voters will decide on Nov. 3. Zuckerberg's disclosure is the clearest signal yet that one of the state's best-known tech executives is willing to treat the outcome as a reason to relocate.