Palmer Luckey to stay in California to fight billionaire wealth tax

Who is affected and why

The proposed California wealth tax targets the state’s richest residents, calculating liabilities based on net worth rather than income. This includes unrealized assets—such as unsold equity in privately held companies—and illiquid assets like voting control in corporations. Penalties for non-compliance could reach 40%.

Palmer Luckey, whose defense tech firm Anduril is valued at $61 billion, estimates he could owe around $3 billion under the proposal. His liability stems from his voting control of Anduril, which the tax proposal treats as equivalent to ownership. Luckey has preserved his voting rights despite diluting his equity stake and distributing shares to employees.

Why Luckey is pushing back

Luckey, who sold Oculus VR to Facebook for $2 billion at age 21, opposes the tax on principle. He has stated he will not leave California, preferring to fight the measure from within. According to TechCrunch, he has faced pressure from other billionaires to publicly commit to leaving the state, but he has declined to do so.

Luckey acknowledged the argument that staying in California enables policies he opposes but said he does not plan to participate in an exodus of wealthy residents. He emphasized that his focus is on challenging the tax’s legality and practicality rather than relocating.

The tax is sponsored by a unit of the United Healthcare Workers and is intended to fund health care, education, and food assistance programs, including Medi-Cal.

How the tax works and who else it impacts

The wealth tax proposal diverges from traditional income-based taxation by including unrealized gains and voting control in privately held companies. For example, Larry Page, who has left California, retains 27% voting control of Alphabet, which could expose him to similar liabilities if the tax were retroactive or if he maintained ties to the state.

The Tax Foundation, a policy research group, has warned that the proposal’s approach to voting control could create outsized liabilities for founders and executives. A founder with 40% voting control but only 10% ownership could be taxed as if they owned the higher percentage, potentially leaving them unable to cover the tax bill even if they sold all their shares.

Anduril, as a defense contractor selling primarily to the U.S. military, operates in a sector with limited flexibility to relocate. This underscores how the tax could disproportionately affect companies in industries tied to government contracts or physical infrastructure.

What this means

Lazyfounder analysis — our interpretation, not reported fact.

California’s proposed wealth tax isn’t just a political statement—it’s a test case for how far states can go in targeting unrealized and illiquid assets. For founders, especially those in defense, aerospace, or other capital-intensive sectors, the rule could force a reckoning: stay and fight, restructure voting control, or reconsider their ties to the state. Luckey’s decision to stay puts a high-profile face on the resistance, but the broader question is whether other founders will follow his lead or quietly explore alternatives.

The tax’s focus on voting control also highlights a growing tension between founder-friendly governance structures and regulatory risks. Dual-class shares and voting agreements are common tools for maintaining control, but they may become liabilities if more states or countries adopt similar policies. Founders who rely on these mechanisms may need to weigh their benefits against the potential financial exposure.

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