California has once again made a big move. Someone wants to increase taxes on the state's ultra-rich—specifically, they plan to impose a one-time 5% tax on their assets. This proposal has angered many people; not only has the business community exploded in protest, but even Governor Newsom has come out against it.

The logic behind this proposal is straightforward: those with billions in wealth may actually pay less in taxes than middle-class earners. So why not make them pay a bit more? If enough signatures are collected, the proposal can be put to a vote by California voters this November.

The problem is, this move could backfire. Over the years, the Bay Area's economy has been transformed by the AI industry, with tech entrepreneurs and major investors driving the recovery. If these people are truly hit with heavy taxes, many might just pack their bags—and some have already started to do so.

California voters' attitudes are actually quite conflicted. They are generally willing to vote for higher taxes on the wealthy, but at the same time, they approved Proposition 13 in 1978, which set strict limits on property taxes. That’s just California style.

Interestingly, while this proposal appears to be thorough and well-planned on the surface, there are still huge hurdles before it becomes law and is implemented. First, it must pass the vote; then, it must withstand various legal challenges. The threat from California's wealthy to "relocate elsewhere" may sound like bluffing, but in high-tax regions, capital migration has already become a common phenomenon.

For the tech industry, venture capital circles, and the entire California economic ecosystem, this is a critical juncture. Shifts in tax policy often influence the startup funding environment, talent flow, and even the investment momentum of emerging industries.