Crypto Titans Deploy $40M War Chest to Kill California’s 5% Wealth Tax

The Counter-Offensive Begins

Ripple co-founder Chris Larsen and venture capitalist Tim Draper have launched a $40 million political offensive to dismantle a looming California wealth tax that threatens to seize 5% of billionaire assets. Operating under the banner Grow California, the initiative targets the California Billionaire Tax Act, a union-backed ballot measure that would levy a one-time retroactive tax on residents with a net worth exceeding $1 billion.

Larsen and Draper seeded the PAC with an initial $10 million, securing commitments for the remaining $30 million to elect moderate Democrats who will oppose the measure. The move marks a kinetic escalation in the war between Silicon Valley capital and the Service Employees International Union (SEIU-UHW), which argues the tax is necessary to plug a projected $100 billion healthcare funding gap.

The government unions do a great job. But that’s going to clash with a lot of the things that are going to make California successful if there’s no counterforce. Chris Larsen

The "Hotel California" Clause

The proposed legislation contains a retroactive residency hook that has triggered immediate capital flight. Under the act, any billionaire residing in California as of January 1, 2026, would be liable for the 5% levy, payable in 2027. This deadline has reportedly forced Google co-founder Larry Page and early Facebook investor Peter Thiel to accelerate their exit strategies, shifting assets and residency to Florida and Nevada before the calendar turned.

If passed, the tax would confiscate approximately 5% of unrealized gains, a structure critics argue forces founders to liquidate controlling stakes in their companies to pay the bill. For Larsen, whose wealth is tied significantly to XRP (currently trading at $1.72, down 3% in 24h), the bill could mandate a massive forced sell-off of the token, potentially destabilizing its market liquidity.

Institutional Fallout

The Larsen-Draper alliance signals a shift in crypto’s political strategy from federal lobbying to state-level defense. While federal super PACs like Fairshake focused on Congressional seats, Grow California is a localized firewall designed to prevent a precedent-setting wealth confiscation model from taking root in the nation’s largest economy. The initiative will focus exclusively on state legislative races, bypassing the gubernatorial contest to maximize impact on the assembly floor.