LAS VEGAS – The skyline of the Las Vegas Valley has a new resident, and the California Treasury has a massive potential hole in its future balance sheet. Don Hankey, the 82-year-old financial services titan and longtime Los Angeles fixture, has officially traded the Golden State for the Silver State, citing a proposed "billionaire tax" as the primary driver behind his departure.
The move was punctuated by a record-shattering real estate transaction. Hankey recently closed on a $21 million, 5,000-square-foot luxury penthouse at the exclusive Summit Club in Summerlin. The purchase marks the highest price ever paid for a condominium in the Las Vegas area, signaling a growing trend of ultra-high-net-worth individuals seeking sanctuary in Nevada’s tax-friendly climate.
The $400 Million Ultimatum
For Hankey, whose net worth is estimated by Forbes at $8.2 billion, the decision was a matter of simple arithmetic and a feeling of being pushed out. At the heart of the controversy is a proposed California ballot initiative that would impose a one-time, 5% tax on the global assets of billionaires residing in the state as of January 1, 2026.
If the measure passes and Hankey were still a California resident, his tax bill would sit at approximately $400 million.
"It’s ridiculous," Hankey told Forbes from his new residence, which features a private lap pool and panoramic desert views. "I just felt a little bit like I wasn’t wanted. We’ve created a lot of jobs in California... and now I have to leave the state."
The proposed tax aims to raise an estimated $100 billion to fund healthcare and education programs. Proponents, including the Service Employees International Union–United Healthcare Workers West, argue that the ultra-wealthy must pay their "fair share" to address the state's budget deficits and social needs.
A Legacy Left Behind
Hankey’s departure is more than just a change of address; it is the end of an era for Los Angeles business. A lifelong Californian and USC alumnus, Hankey built the Hankey Group from a single struggling Ford dealership in 1972 into a $30 billion empire. His Westlake Financial is now one of the nation's premier subprime auto lenders.
Beyond car loans, Hankey has been a pivotal figure in California real estate and finance. He was a key financier for "The One," the Bel Air megamansion, and his insurance company recently made headlines for providing a $175 million bond for Donald Trump in a New York civil case.
While the Hankey Group headquarters will remain in Los Angeles for the time being, Hankey indicated that his future investments would likely follow him to Nevada. "There’s no reason to be in California full-time," he noted, adding that he plans to spend at least two-thirds of the year outside of his home state.
The "Tax Migration" Debate: Myth or Reality?
Hankey is not alone in his flight. He joins a growing roster of billionaires—including Google co-founder Larry Page, Uber founder Travis Kalanick, and venture capitalist Chamath Palihapitiya—who have either moved or significantly reduced their California footprint.
Academic experts and proponents of the bill remain skeptical of a mass exodus. David Gamage, a law professor and one of the proposal's authors, maintains that academic literature suggests very few wealthy individuals actually move for tax reasons.
However, those who have left tell a different story. Russell Savage (formerly Russ Weiner), the founder of Rockstar Energy, dismisses the idea that the "wealth flight" is an exaggeration. "Larry Ellison left. I left. Elon Musk left. The proof is in the pudding," Savage said. "It’s going to destroy the state."
Looking Ahead: The 2026 Ballot
The fate of the wealth tax now rests with the voters. The initiative requires roughly 900,000 signatures to qualify for the ballot. Even if it passes, it faces a gauntlet of certain legal challenges regarding the constitutionality of taxing unrealized gains and assets held outside the state.
Even California Governor Gavin Newsom has expressed opposition to the bill, wary of the message it sends to the business community. Yet for Hankey, the mere threat was enough to trigger the move. He believes that even if this specific bill fails, the precedent has been set.
"I don't think it will be a one-shot deal," Hankey warned. "It's going to come back again as soon as California needs money again."
As the January 1, 2026 deadline looms, the question remains: how many more of California's 180+ billionaires will be phoning in their next interviews from the desert of Nevada or the beaches of Florida?
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