Silicon Valley billionaires such as Sergey Brin, Larry Page and Peter Thiel have already moved to Florida in response to California’s threat to tax large fortunes. Without hesitation, big tech has flocked to Miami mansions to avoid a tax that has yet to be voted on.
Mark Zuckerberg is another of those millionaires who, after being registered on the West Coast of the United States for more than two decades, made a trick by buying a mansion in front of the warm beaches of Miami. However, according to The Wall Street JournalMeta made the move by “protecting” its CEO so he wouldn’t have to move and stay close to Meta’s offices in Silicon Valley.
5% on whole fortune. The sudden migration of millionaires to the East Coast of the United States is due to a tax described in Proposition 40 that Californians must vote on November 3. The proposal proposes a lump sum payment of 5% on their total assets above $1,000 million. According to the official guide, it will collect billions over a few years. It will apply to all California residents on January 1, 2026.
As I am ForbesZuckerberg will have to pay about $11 billion with this new tax. An unthinkable personality that pushed him to pack his bags. However, until it’s voted on, the measure is just a proposal that, according to a September poll, has 52% of likely voters saying yes and doesn’t have the support of California Governor Gavin Newsom, even though he’s in favor of tougher taxes on the big fortune.
The objective: to retain Zuckerberg. Unlike other CEOs of large corporations (especially when they’re their founders) Zuckerberg doesn’t have a fixed salary to draw. In fact, according to documents presented by Meta, its CEO has been paid a dollar a year since 2013 and his wealth is based on Meta shares. It owns 13.4% of Meta’s total capital, but controls 60.6% of the votes because each class B share carries ten votes.
This distribution of shares and power between Meta means that if Zuckerberg has to pay the California rich tax, he’ll have to do so by selling shares, so his voting weight could drop to about 53%. The document even acknowledges that, with taxes, Zuckerberg will pay to run Meta out of California.
Moved to Miami. Zuckerberg told the Meta committee that he was “evaluating moving his primary residence out of California” and recalled the difficulties of running their company during the pandemic, when Zuckerberg was unable to work with his management team.
Larry Page and Sergey Brin left before the tax deadline, which would have retroactive effect for all millionaires living in California through most of 2026. Brin is actively involved in the cause and has contributed 102 million to the opposition campaign. Jensen Huang, on the other hand, says he’s “totally fine” with paying it.
Shield of Meta. To keep Zuckerberg from having to take money out of his pocket to continue managing Meta, the company will create a new class of non-voting Class C shares in January 2027, and issue one for each existing share, which is the equivalent of splitting each title in two (a split). That way, the CEO would be able to freely sell 20% of his shares if he had to pay the millionaire tax, without losing control. In other words, it doubles the voting power from the economic potential of these shares.
In exchange, Zuckerberg agreed to live in California or wherever Meta is based, barring serious unforeseen events, for eight years.
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Picture | Aim, great
