Former Los Angeles mayoral candidate and billionaire businessman Rick Caruso said California’s proposed billionaire tax came close to convincing him to leave the state.
Caruso, a prominent Los Angeles developer and philanthropist, told the California Post exclusively that he hired attorneys and financial advisers to examine what a move away from California would mean.
“Given the financial impact, you have to at least think about that,” the Los Angeles native said. “You have to at least consider it.”
The real estate magnate, whose holdings include The Grove and the Rosewood Miramar Beach resort, considered relocating to Austin, Texas, or to Miami, Coconut Grove or Palm Beach in Florida as the proposed tax threatened to significantly reduce his wealth.
“We were working with our lawyers and consultants on figuring out exactly what the impact was going to be on the business and the family,” he said.
Caruso began evaluating his options earlier this year as Proposition 40 gained momentum. The measure would impose a one-time 5% tax on California billionaires.
As of Saturday morning, 53.7% of voters opposed the initiative, while 46.2% supported it, with about 72% of the estimated vote counted, according to the latest results.
Proposition 40 promised to raise tens of billions of dollars for healthcare, education and food assistance. Critics, however, warned that an exodus of wealthy taxpayers could cost California more than the tax ultimately generated.
Several billionaires have already moved out of the state.
An October study by economists Benjamin Jaros and Joshua Rauh identified seven billionaires who had publicly relocated. Together, they represented roughly $540 billion in wealth—nearly 30% of the potential tax base.
The group included Google co-founders Larry Page and Sergey Brin, along with venture capitalist Peter Thiel.
The study estimated that California billionaires pay between $3.3 billion and $5.8 billion in state income taxes each year, raising concerns that further departures could weaken the projected $28 billion to $36 billion revenue windfall.
Although Caruso seriously considered leaving, he said no possible tax savings could outweigh what mattered most to him and his wife.
“My wife and I couldn’t imagine waking up and not having our family,” he said.
“In the end we decided that if we have to pay a big tax, we’ll pay the big tax, but we have our family.”
Even so, Caruso cautioned that the proposition could cost California much more than the fortunes of its wealthiest residents.
“The problem is when a couple hundred billionaires leave, what also leaves is businesses, their teams, their management, their staff, their employees, but most of all their philanthropy,” Caruso said.
“All of a sudden their philanthropy goes to a different city where now they’re living.”
Caruso’s business holdings and charitable contributions underscore the broader economic stakes of the debate.
His portfolio includes The Americana at Brand, Palisades Village and The Commons at Calabasas. Four construction projects are also underway across Southern California.
“We’re creating not only a lot of construction jobs, but we’re creating a lot of operating jobs,” he said.
Since establishing their family foundation in 1991, Caruso and his wife, Tina, have donated millions of dollars to education, healthcare and underserved communities. Their giving includes a $50 million contribution to Pepperdine University’s law school.
The couple has also given more than $50 million to the University of Southern California, including $25 million for hearing-loss research and treatment. They donated another $5 million to launch Operation Progress, which supports disadvantaged students in Watts, and more than $3 million to Para Los Niños, an organization serving vulnerable Los Angeles families.
After the devastating January 2025 wildfires, Caruso launched Steadfast LA to help speed rebuilding efforts in Pacific Palisades and Altadena.
The nonprofit said it had distributed $525,000 in recovery grants to small businesses. Caruso and his wife also pledged $5 million to support the Los Angeles Fire Department.
With Proposition 40 heading toward defeat and Proposition 42—which would eliminate the billionaire tax—expected to pass, Caruso said California has a chance to reverse the trend of wealthy residents leaving.
“The combination of Prop 40 failing and Prop 42 winning is really a great package to incentivize people coming to California and staying in California,” he said.
