White House AI and Crypto Czar David Sacks on Friday, June 27, 2026, publicly rebuked California Governor Gavin Newsom for failing to block the Billionaire Tax Act, warning that the measure's advance to the November ballot would accelerate the technology industry's departure from the state toward Texas.

Context

Sacks posted on X that Newsom had been expected to intervene and 'cut a deal to kill the Billionaire Tax Act' but instead, in Sacks's words, 'came out as DSA-adjacent' — a reference to the Democratic Socialists of America, the left-wing organisation that advocates wealth redistribution and higher taxes on the wealthy. The post concluded with a pointed farewell: 'See y'all in Texas!' — widely read as a signal of further business migration out of California.

The remark positions Newsom not as a moderate dealmaker but as aligned with the progressive left flank of his party, a characterisation that carries significant political weight as the governor is widely regarded as a potential future presidential contender.

Policy Backdrop

The Billionaire Tax Act is a proposed California tax measure targeting high-net-worth individuals. Its advancement to the November 2026 ballot follows a long lineage of California tax increases on high earners, including Proposition 30 passed by voters in 2012, which raised income taxes on the wealthy to fund education.

Between 2020 and 2024, multiple high-profile technology firms — including Tesla and Oracle — relocated headquarters or significant operations from California to Texas, citing the burden of taxes and regulation. Sacks's post suggests that pattern is far from over.

Stakeholders and Impact

The immediate stakeholders are California's high-income technology entrepreneurs, investors, and executives — precisely the constituency that figures like Sacks represent and that the Trump administration has cultivated through appointments such as his own. A wealth tax on billionaires, if passed, could affect capital allocation decisions, startup funding flows, and the location choices of venture-backed companies.

For Texas, the prospect of further corporate migration represents continued economic opportunity. The state has positioned itself as a lower-tax, business-friendly alternative, and Sacks's public endorsement of the 'Texas exit' narrative reinforces that competitive dynamic at the highest levels of the federal government.

What's Next

The Billionaire Tax Act is now set to go before California voters in November 2026. The outcome will be closely watched by technology investors, corporate boards, and policymakers across the country. Any announced relocations or major investment shifts in the months leading up to the vote are likely to be framed — by both sides — as evidence for or against the measure.

Sacks's intervention, coming from his perch as a White House official, adds a federal dimension to what has until now been a state-level fiscal debate, potentially drawing the Trump administration more directly into California's tax politics ahead of a high-stakes ballot.