Billionaire Don Hankey Criticizes Prop 40 After Leaving California

Billionaire Don Hankey, who moved to Las Vegas before the residency deadline for California’s proposed wealth tax, criticized the measure as economically unsound. Hankey confirmed his relocation came in December, just before the January cutoff.

Hankey, whose firm specializes in real estate and auto loans, said he felt unwelcome in California and that the state had sacrificed income tax revenue by losing wealthy residents. He noted that his company still maintains its headquarters in Los Angeles.

Hankey owns 50% of an office building in Las Vegas, where his firm currently occupies two floors. He indicated the possibility of expansion, citing fewer potholes in the city as a factor in his decision.

More than 100 economists, including Nobel laureates and a former White House economic adviser, warned that the tax is already driving wealthy residents out of the state. They argued that the tax’s retroactive reach and legal complexities could lead to further capital flight.

Opponents of the tax, including the California Business Roundtable, are preparing legal challenges if Prop 40 passes. The roundtable’s president said the tax is the worst possible policy at a bad time for the state.

Supporters of the tax, including the SEIU-United Healthcare Workers West, argue it would fund health care and other services. However, Stanford researchers estimate the tax would collect only a third of the projected $100 billion, while also reducing income tax revenue from those who leave.