SAN FRANCISCO — Coinbase CEO Brian Armstrong is considering whether California remains the right long-term home for the cryptocurrency company amid a proposed tax targeting the state's wealthiest residents.
Armstrong has criticized the proposed measure, known as Proposition 40, which would impose a one-time 5% tax on the net worth of roughly 200 billionaires in California.
Silicon Valley's Tax Debate Reaches Crypto
California's tax environment has long been a source of debate among technology entrepreneurs.
The state has produced enormous numbers of successful technology companies and wealthy founders.
But high taxes have also encouraged some entrepreneurs to consider relocating.
Armstrong's comments add a major cryptocurrency company to that discussion.
Coinbase operates remotely but has maintained a significant presence in San Francisco.
The company recently leased substantial office space in the city.
The proposed wealth tax would be unusual because it would target assets rather than annual income.
Supporters say the measure could generate substantial funding for public programs.
Opponents argue that taxing wealth directly could encourage wealthy residents and businesses to leave the state.
The issue could have broader implications for California's technology economy.
The state depends heavily on high-income taxpayers and capital gains.
If wealthy technology founders relocate, California could potentially lose both tax revenue and entrepreneurial activity.
Armstrong has also argued that the proposed tax could create constitutional concerns.
The measure is scheduled to go before California voters.
The debate could become especially significant for Silicon Valley.
Technology companies often compete internationally for talent and capital.
Higher taxes could therefore influence where entrepreneurs decide to build their next businesses.
For California's cryptocurrency industry, the debate represents another intersection between technology, taxation and public policy.
