Millionaire abandons move to California due to proposed wealth tax

A 23-year-old millionaire entrepreneur who was preparing to move to San Francisco abandoned his plans because of California’s proposed wealth tax.

Emil Barr warned that the state’s political climate could keep young business founders away and deprive residents of job opportunities.

Barr, who immigrated to the United States from Russia when he was three years old, is the founder of Flashpass, a Columbus, Ohio-based company that helps laid-off workers develop new skills and find jobs faster.

He had already signed a personal lease in San Francisco and planned to move first, settle in the city and possibly bring his business to California afterward.

But Barr changed his mind after learning about Proposition 40, a proposed wealth tax targeting the state’s wealthiest residents on this year’s Nov. 3 ballot, which he fears could eventually extend to millionaires like him.

“I just didn’t feel welcome as an entrepreneur,” Barr told the California Post. “Obviously, I’m a little more sensitive to that because I work with the government, but I said, why should I move to a state where the government, of all things, vilifies entrepreneurs and says that for some reason, if you’ve built a successful chip manufacturing company, the fact that the health care system isn’t working is your fault?

Proposition 40 would levy a one-time 5% tax on billionaires living in California starting January 1, 2026.

Unlike the income tax, the measure would target their total accumulated wealth, with most of the money collected going toward state health care.

Barr is not the only prominent critic of the proposal. California Governor Gavin Newsom also spoke out against the measure, while Google co-founder Sergey Brin contributed financially to efforts to defeat it.

But its supporters, including Debru Carthan, vice president of SEIU-United Healthcare Workers West, the union behind the initiative, pushed back against warnings that the tax would cause wealthy Californians and investors to flee the state.

Carthan told Fortune those concerns were unfounded. Supporters argue the measure is needed to help offset the $100 billion in federal health care funding California could lose over the next five years.

As for Barr, he said the proposed tax was also particularly concerning because of its potential retroactive implications, which he said could force wealthy individuals to pay taxes based on assets they held before the measure was approved.

Although the proposal does not apply to him at the moment, he fears it could set a precedent by taxing entrepreneurs with smaller fortunes.

“Today it’s the billionaires,” Barr said, expressing concern that future proposals could target people worth $10 million or more.

For Barr, the decision wasn’t just about avoiding higher taxes. He said he understood that doing business in California would be expensive and was initially willing to accept that cost.

What ultimately drove him away, he said, was what he perceived as an increasingly hostile political attitude toward successful entrepreneurs.

“Why should I move to a state where the government is all about vilifying entrepreneurs,” Barr said.

His decision could also have consequences beyond his own business.

Barr founded Flashpass about two years ago after selling his first company, Step Up Social, a marketing and media company he started at age 18 while in college.

Flashpass is now working with government agencies to help unemployed workers retrain and re-enter the workforce more effectively.

California initially seemed like a great place to expand because of its concentration of artificial intelligence companies and research labs.

Barr believed the state would be among the first to see significant job losses as AI technology advances, creating an opportunity for Flashpass to help workers transition into new careers.

“We saw it as a very logical reason to be close to the latest developments in AI and also closest to the people who are losing their jobs first to AI,” Barr said.

He argued that without his company establishing a presence in California, residents may have fewer opportunities to access its services and quickly find employment.

“I don’t think California will have the same level of access to our platform,” Barr said, adding that residents “won’t be able to find a new job as quickly just because our company isn’t there.”

These potential effects remain unclear, however, because Barr had not yet committed to moving the company or established the number of California workers Flashpass could have served.

His original plan was to move to San Francisco before deciding whether to relocate the business.

“I had a personal lease in place and was planning to move,” Barr said.

But without the founder living in California, he said, moving the company’s headquarters was no longer a realistic possibility.

Barr acknowledged that California would lose relatively little in taxes from his decision alone. Instead, he says the bigger concern is what might happen if other young entrepreneurs follow his lead.

He said he knows of other company founders who have privately decided to leave California or avoid moving there, although many are reluctant to speak publicly about their decisions because of Silicon Valley’s reputation as a global center of innovation.

“There’s this idea that if you’re not in Silicon Valley, you can’t create an innovative company,” Barr said.

He believes entrepreneurs who disagree with California politics should make their opposition known through their business decisions, rather than continuing to invest in a state whose political leaders they believe are targeting them.

Barr’s company remains based in Columbus, where it was established after receiving its first government contract from the state of Ohio.

He said he hasn’t ruled out moving the company elsewhere, but that California is no longer being considered.

“I’m not even 100 percent sure we’ll keep our business in Ohio,” Barr said. “But I know for sure that it won’t be California just because of the political and business rhetoric currently emanating from that state.”

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