A 23-Year-Old Millionaire Scrapped His San Francisco Move Over a Tax He'd Never Pay

By Olivia Hart

Emil Barr, a 23-year-old millionaire founder, canceled a signed lease to move to San Francisco because of a California billionaire tax he would not owe under the current proposal. Barr, who built Flashpass in Columbus, Ohio, told Fortune he fears the levy could pave the way for taxes on millionaires like him.

The tax in question is Proposition 40, on the Nov. 3 ballot. It would impose a one-time 5% tax on accumulated wealth — not annual income — on qualifying billionaires who were California residents on Jan. 1, 2026. Most of the revenue would go to healthcare.

Barr frames his decision as more political than financial. "I think it was less of a matter of immediate finances," he told Fortune. He pointed instead to what he called California's "anti-entrepreneurial" political rhetoric.

There is a caveat worth noting: Barr's company still has employees and investors in California, and he keeps traveling there. The break is personal, not corporate.

What does Proposition 40 actually do?

The measure would tax accumulated billionaire wealth rather than yearly earnings. The nonpartisan Legislative Analyst's Office estimates it would raise tens of billions of dollars over several years, and that 90% of revenue would flow to healthcare.

The analyst's office also models the downside: taxpayer responses, including some departures, could reduce ongoing income-tax revenue by less than $1 billion annually — roughly a rounding error against a levy projected in the tens of billions.

Six Nobel Prize-winning economists, including Joseph Stiglitz, Paul Krugman, and Daron Acemoglu, backed the measure in a September letter. They argued the tax would be modest relative to billionaires' wealth gains and would help replace lost federal healthcare funding.

Opposition runs high-profile. Gov. Gavin Newsom opposes the measure, and Google cofounder Sergey Brin has helped fund the opposition campaign.

Why does a millionaire care about a billionaire tax?

Flashpass builds technology that helps government agencies connect people with work, including those displaced by AI, Barr said. He located in Columbus because Ohio was the first state to use the software.

San Francisco drew him for practical reasons: proximity to investors and AI companies. He had not decided whether to relocate Flashpass's headquarters, but planned to move himself — until California's regulatory and tax climate changed his calculation.

"I'm not 100% sure I'm going to stay in Ohio and keep building the business in Ohio," Barr said. "But I am 100% sure that I wouldn't build a business in California."

He argues the damage could extend beyond one state. "If we keep villainizing entrepreneurs, entrepreneurs aren't just going to leave California; they're going to leave America," Barr said.

He concedes the tax system may need updating — without saying how. "Maybe the solution is paying higher taxes and updating the tax code, but it needs to be done in a more nuanced, progressive way," he said, declining to suggest specifics.

Do wealthy residents actually flee taxes?

Cristobal Young, a Cornell sociologist who has studied tax-driven migration among high earners for nearly two decades, says the fears are often exaggerated.

"The more money you make, the less likely you are to move," Young told Fortune. High earners stay where their careers, partners, networks, and family ties are rooted.

"All of a sudden, you're in a new professional environment, and now you're more of an outsider," he said.

His evidence: after New Jersey raised income taxes on high earners in 2004, with lower-tax Pennsylvania next door, his research found no feared exodus. A 2016 study he coauthored, covering 45 million tax records over 13 years, likewise found limited millionaire tax flight.

But Young flags the limits of his own findings. A one-time levy on accumulated wealth is unprecedented. "We haven't passed a tax like this before in the U.S.," he said.

He doubts such a tax would spread widely, because most states lack California's concentration of billionaires. A tax that exists in only one state leaves a stronger incentive to move.

What do supporters say about investment risk?

Not every billionaire treats the proposal as a reason to bolt. Nvidia CEO Jensen Huang said on a January Bloomberg podcast that he was "perfectly fine" with the proposed tax, citing Silicon Valley's talent pool as the reason the company operates there.

Debru Carthan, vice president of SEIU-United Healthcare Workers West, the union backing the measure, rejected predictions of an exodus. The campaign argues the tax would replace roughly $100 billion in federal healthcare funding it says California will lose over five years — about $20 billion a year.

"This scare tactic just doesn't stand up to scrutiny," Carthan said in a statement to Fortune. "There's more money and investors coming into California now, not less."

She pointed to Massachusetts and Washington, where taxes on wealthy residents raised billions while high-income populations kept growing. Those policies differ from a one-time wealth tax, a distinction she did not address.

Her sharpest warning concerns healthcare, not migration. "That's the real crisis our state is facing," she said, arguing that without new funding, clinics would close, hospitals would lay off workers, and Californians could lose coverage or face higher premiums.

Can a one-time tax fix an ongoing problem?

Tax scholars Brian Galle, David Gamage, and Darien Shanske, writing in the California Law Review, identify the structural gap: investors can accumulate gains in one state, then move before selling assets and triggering a tax bill. They propose taxing gains as they accumulate.

Young agrees the underlying imbalance is real — workers pay tax on wages as earned, while investors defer tax on rising stock values until they sell. But he doubts a one-time levy can solve it.

"It's an ongoing problem. It's a forever problem," he said. "We need a forever solution."

The Nov. 3 vote will test whether California's voters believe a one-time billionaire levy is worth that risk — and whether more founders follow Barr's path before their fortunes are ever large enough to tax.