Coinbase (NASDAQ:COIN) CEO Brian Armstrong addressed the proposed confiscation tax in California, calling it “deeply un-American” and saying he is considering leaving the state. The comments were made during the Katie Miller Podcast, where Armstrong addressed a litany of issues surrounding crypto and the policies that impact the emerging Fintech sector.
The confiscation tax is set to be on the ballot in California this November. Officially called the“2026 Billionaire Tax Act,” the measure would confiscate 5% of any billionaire’s holdings, including unrealized gains in public and private securities. Theoretically, a targeted individual could see their control of a firm undermined or be forced to sell securities or borrow to cover the cost. And some bureaucrat would be enlisted to determine how much everything is actually valued – a terrifying concept. This would apply to affluent individuals and married couples who are residents as of January 1, 2026. It also opens the door to future taxes on individuals who are not considered billionaires. The proposal has already caused an estimated $2 trillion in net wealth to flee the state, with Texas and Florida as the biggest beneficiaries.
This past March, the Hoover Institution based at Stanford University shared that nearly 30% of the tax’s targets had already left the state. The report anticipates that the tax could raise up to $40 billion over 5 years, nowhere near the $100 billion goal. Because wealth has already left California, the net result could be lower state tax revenues, and that loss would be permanent. Over time, the confiscation tax could have the exact opposite effect of its described goal of raising more money for the state of California.
Additionally, California has been plagued by profound fraud and failed projects, depicting a state government that is a poor fiduciary of taxpayers’ funds. Tens of billions of dollars have been lost to health care fraud, and the proposed high-speed train project has spent billions of dollars, has not laid high-speed track on the main line, and has no operating trains. Groundbreaking for the train took place in 2015, over ten years ago.
It is difficult to understand how more money for the state of California will solve current problems and will most likely exacerbate them.
Armstrong believes seizing assets is probably unconstitutional. He views the confiscation tax as like a “third-world country” and a dangerous path to pursue.
“I think it is bad for the state and bad for America,” said Armstrong, who added they are considering any and all options in terms of relocation.
If Armstrong and Coinbase leave California, the state will lose a growing, innovative firm that employs around 1,000 individuals. But if Coinbase departs California, they will join a growing list of firms that have made the same decision, which also includes looking out for their shareholders
