The Residency Line: How a Single Date Divided Silicon Valley’s Billionaire Class

Google co-founder Sergey Brin smiling on stage at TED in 2010

The Residency Line: How a Single Date Divided Silicon Valley’s Billionaire Class

Oct 17

Top image: Google co-founder Sergey Brin in 2010. Photo: Steve Jurvetson / CC BY 2.0 via Wikimedia Commons

Silicon Valley’s richest residents have long kept homes in more than one place. In 2026, where they live has become a tax question. Proposition 40, the proposed one-time 5% tax on the assets of California billionaires, applies to anyone who was a state resident on Jan. 1, 2026, according to the Legislative Analyst’s Office. That date has already become a dividing line among the region’s wealthy.

Who’s leaving, and who’s counting

According to CalMatters, Google co-founder Sergey Brin is “among a handful of billionaires who have moved residences or business assets out of the state in an attempt to avoid the proposed tax.” Brin has also spent more than $138 million opposing the measure.

San Francisco tax attorney Jon Feldhammer told CalMatters that “a third to half” of his clients have left the state over the proposal. He declined to say how many clients that is. Other tax lawyers told the outlet that people worth less than $1 billion are also considering moving to avoid limits on their future earning potential. A Hoover Institution analysis cited by CalMatters estimates that billionaires representing 30% of the tax base have said publicly that they have left.

Not everyone agrees on how much to read into this. “I wouldn’t jump from the evidence we have to California,” University of Michigan economist Joel Slemrod told CalMatters, noting that European wealth taxes were designed very differently.

The wine vault problem

The measure goes beyond stock portfolios. It would require the state to value “billionaires’ stock, investment accounts and business interests, but also their art collections, wine vaults, cars and anything else that stores wealth,” CalMatters reported. “I have a client who has a machine gun collection,” Feldhammer said.

The more contentious category is startup equity, which in Silicon Valley often makes up most of a founder’s wealth. Feldhammer objected to the measure’s approach of valuing a private company by its most recent fundraising round. “How do you value a company that is not on the public market? It doesn’t even have a product yet. It’s not making any money,” he said. He expects long legal challenges from people “who have oftentimes plenty of wealth to spend on legal fees to put up the best defense money can buy.”

For those who stayed past Jan. 1, Feldhammer gave a blunt summary of the legal strategy: there is a “reasonable argument that the law may be unconstitutionally retroactive — but to take advantage of that, you’re going to have to leave.”

The long view

For a generation, Silicon Valley’s wealthy were tied to the region by networks: board seats, deal flow, schools, and philanthropy concentrated within a few miles of Sand Hill Road. Prop. 40 tests whether those ties hold when staying carries a price. Even if the measure fails (Gov. Gavin Newsom has endorsed a countermeasure, as CalMatters reported), a residency change made in 2025 is not easily reversed. The guest lists, foundation boards, and civic leadership of the Peninsula may look different in five years, and the reason will trace back to a single residency date.