California entrepreneur warns billionaire wealth tax could trigger 'giant sucking sound' of business exits

California entrepreneur Eric Schiffer warned that the state's proposed billionaire wealth tax could drive some of its most successful business leaders out of California, predicting a "giant sucking sound" of entrepreneurs heading for the exits if voters approve the measure.

Schiffer, chairman of family office Patriarch and CEO of Reputation Management Consultants, told FOX Business that he works with several billionaire clients, including some in California, and said many are unhappy about the proposal. "I think the impact of this passing in California is a giant sucking sound of all of these entrepreneurs being sucked out of California because they're just not going to want to stay," Schiffer said. "Why would anyone stay if they have spent their life building wealth that they were already taxed on?" he continued.

"You're going to see some of the most brilliant, most successful men and women that have been the cornerstone of tax revenue and donational revenue and leading companies that are employing fleets of individuals and scores of individuals, they're going to say, 'No mas, I'm out. Goodbye,' because they don't feel respected or appreciated and they feel under attack," Schiffer said.

Proposition 40, which is on the Nov. 3 ballot in California, would impose a one-time tax equal to 5% of net worth on billionaires who were California residents on Jan. 1, 2026. The tax would be due in 2027, although payments could be spread over five years at an additional cost. Real estate, pensions and retirement accounts generally would be excluded from the tax.

Schiffer argued that the tax could also affect Californians without billion-dollar fortunes, saying the consequences could reach their workplaces and economic opportunities. "I think some of the consequences, if you're a working individual in California, is there's going to be less opportunity," Schiffer said. He argued that if entrepreneurs relocate, the state could lose businesses, jobs, investment and tax revenue. "If you think California, when you have all these billionaires bolt, isn't gonna hurt and isn't going to create problems and isn't going to reduce tax revenue and reduce jobs, boy, you're smoking some of the stuff that they're selling in California in some of these stores," he said. Schiffer also argued that the state could eventually seek to impose similar taxes on people with smaller fortunes.