🚨 Crypto rich flee California over “new-tax bluff” 🚨
Millionaire crypto holders are quietly relocating to Texas, Florida and Puerto Rico after Governor Gavin Newsom’s December 2024 budget proposal floated a 2.5 % annual wealth tax on digital-asset holdings > 50 m, retroactive to 1 Jan 2025.虽然 the provision was dropped within 72 hours, accountants report a 300 % spike in out-of-state domicile requests among Silicon-Valley token whales.
🔑Key points
🔹 Proposal snapshot: Draft line-item projected 7.4 bn/yr revenue by taxing unrealised crypto gains; applied to residents and anyone domiciled > 60 days in-state.
🔹 Trigger event: Language removed before final budget, but FTB guidance already signalled intent to treat wrapped tokens, staking rewards and airdrops as mark-to-market income.
🔹 Migration data:
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SF → Austin: chartered flights +180 % Dec vs Nov
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Miami condo inventory < 5 m: down 22 % in 30 days
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Puerto Rico Act 60 applications: 4-week queue now 14 weeks
🔹 Estate-planning rush: Family offices moving grantor trusts and DAO treasury entities to Wyoming and South-Dakota trust companies before 15 Jan 2025 tax-year close.
🔹 Psychological scar: Even without enactment, “tax-bluff” created Domicile Flight—once residency is formally shifted,California loses the income-tax base permanently.
🔎Why it matters
🔹 Revenue bleed: Top 0.2 % of CA crypto filers paid 3.1 bn in cap-gains in 2023; losing just 10 % of them erases the entire 740 m projected from the abandoned wealth-tax.
🔹 Network effect: Crypto VC partners relocating headquarters pulls portfolio companies, engineers and future IPOs out of Silicon-Valley ecosystem.
🔹 Policy contagion: Law-makers in NY, NJ and IL are watching; if “threat-and-retract” successfully exports millionaires, expect copy-cat “trial-balloon” budgets.
🔹 Market signal: No-tax states are already marketing “crypto-safe harbour” bills (Texas SB 21, Florida HB 701) to lock in new residents before 2026 filings.
https://cointelegraph.com/news/crypto-rich-leave-california-new-tax-bluff