Peter Thiel Makes His Biggest Donation in Years to Help Defeat California's Billionaire Wealth Tax

Peter Thiel, founder of Clarium Capital and co-founder of Palantir, has donated $3 million to the California Business Roundtable to oppose the proposed 2026 Billionaire Tax Act. The measure, which would impose a one-time 5% tax on individuals with a net worth exceeding $1 billion, has drawn sharp criticism from the state's ultra-wealthy. Thiel's contribution is the largest publicly disclosed political gift in recent years and is expected to serve as a rallying point for anti-tax efforts.

Governor Gavin Newsom has also publicly opposed the initiative, emphasizing that it could deter innovation and economic investment in California. Newsom has vowed to "do what I have to do to protect the state," even though he lacks the authority to veto the measure if it passes. His stance aligns with several major tech figures, including Google co-founders Larry Page and Sergey Brin, who have already shifted assets out of California.

The proposed tax has become a political flashpoint. It is backed by the Service Employees International Union (SEIU), which argues that the revenue would help fund healthcare and education programs. However, opponents, including the California Business Roundtable, argue that the tax would harm the state's economic competitiveness.

Why the Move Happened

The initiative has galvanized California's ultra-wealthy, many of whom see it as an existential threat to their fortunes. Thiel's donation is part of a broader effort to mobilize resources against the measure. The Palantir co-founder has a history of supporting anti-tax causes and conservative campaigns, including a $1 million contribution to Donald Trump's 2016 presidential campaign.

The proposed 5% tax would apply to any California resident with a net worth exceeding $1 billion. Assets such as stocks, intellectual property, and collectibles would be included, while real estate and certain retirement accounts would be exempt. Critics argue that the tax would create an uneven playing field for startups and early-stage wealth, which may struggle to liquidate assets to meet the payment requirements.

How the Initiative Could Impact the Economy and Tax Policy