Billionaires bolt from blue states amid tax fears, mirroring rebellion in ‘Atlas Shrugged’ novel

Ayn Rand was a Russian-born writer who immigrated to the United States in 1926, worked as a screenwriter and playwright and wrote several novels expressing an individualistic philosophy she called “objectivism.”

Rand’s novels and outspoken ideology were subjects of academic and media debate from the onset of her literary career, but controversy soared with the 1957 publication of her 1,168-page “Atlas Shrugged.” The novel describes a revolt by business executives, inventors, artists and other accomplished Americans who opposed suffocating taxes and regulations.

Rand likens the rebels to Atlas, a figure of Greek mythology who holds the world on his shoulders. But in Rand’s book, the characters shrug off their burden and retreat to a remote and invisible valley in Colorado dubbed Galt’s Gulch, named for the rebellion leader, John Galt.

This bit of literary history is offered because we’re seeing a flight of wealthy entrepreneurs from California and other blue states, due to regulations and taxes aimed specifically at them.

The most obvious example is the relocation of a handful of California’s 200 or so billionaires to such states as Florida, Nevada and Texas in response to a health care union’s proposed 5% tax on their wealth via a ballot measure in November. The proposal, if passed, would generate an estimated $100 billion over four years, mostly to support health care services.

“This extraordinary wealth migration is reshaping south Florida: spurring development, tripling real estate prices for trophy properties (even as single-family home prices in the state have stagnated here) and amplifying demand for nannies, private chefs, exclusive golf club memberships and private schools,” the Los Angeles Times reported recently.

“They’re trying to kill and eat the golden goose of technology startups in California,” said Garry Tan, CEO of the startup incubator Y Combinator, in a posting on X describing wealth tax advocates.

A bigger concern, at least in the Capitol, is that if billionaires flee, California’s budget would take a big hit on income tax revenues. The top 1% of California taxpayers now supplies nearly half of all income tax collections. Gov. Gavin Newsom opposes the wealth tax, calling it “really damaging to the state,” saying it will “drive away affluent residents,” and promising to work to defeat it.

As Silicon Valley’s tech tycoons weigh whether to leave California, they are also pledging tens of millions of dollars to oppose the proposed measure and to qualify other measures that would hamstring its effects were it to pass.

 “Of course they’re going to oppose this,” Jack Citrin, emeritus professor of political science at UC Berkeley, told the San Jose Mercury News. “They want to control what they do. They want to live a particular lifestyle. They want to give money to their heirs.”

The exodus of billionaires isn’t confined to California.

New York City’s newly elected socialist mayor, Zohran Mamdani, wants that state’s Legislature to enact a spate of new taxes, but Gov. Kathy Hochul is opposed, worrying it could accelerate a leakage of wealthy New Yorkers.

“I need people who are high net worth to support the generous social programs that we have in our state,” she said at a Politico forum last week.

Meanwhile Washington, one of the few U.S. states that doesn’t have an income tax, is on the verge of enacting one.

Last week, its Legislature gave final approval to a 9.9% tax on incomes of $1 million or more, and Gov. Bob Ferguson says he will sign it. As the tax loomed, Howard Schultz, founder of the Starbucks coffee shop chain, announced he’s relocating to Florida. Starbucks’ headquarters is moving to Tennessee.

It may not be the massive exodus that Rand depicts in Atlas Shrugged, but what’s happening certainly mirrors the novel’s underlying tensions.