Silicon Valley billionaires panic over California’s proposed wealth tax

Did you lose California? Larry Page? The Google and Alphabet co-founder, who left day-to-day operations in 2019, has seen his net worth rise in the years since — from about $50 billion at the time of his departure to nearly $260 billion today. (Quitting his job obviously didn’t hurt his wallet.) Last year, a proposed ballot initiative in California threatened billionaires like Page with a one-time 5% wealth tax, prompting some of them to consider leaving the state before the end of the year, when the tax, if passed, would be applied retroactively. Page appears to have been one of these defectors; The Wall Street Journal reported that he recently spent more than $170 million on two homes in Miami. The article also noted that his co-founder Sergey Brin may also become a Florida man.

The Google men, once California icons, are just two of about 250 billionaires subject to the plan. It is not certain whether many of them left for Florida, Texas, New Zealand, or to a space station. But it’s clear that a lot of billionaires and other wealthy people are publicly losing their minds over the proposal, which will appear on the November ballot if it gets about 875,000 signatures. Hedge fund tycoon Bill Ackman He describes it as “disastrous.” Elon Musk, the richest man in the world, bragged that he already pays so much in taxes that in one year he demands his tax return. Broken IRS computer.

However, when viewed as a percentage of income, even the large sums paid by some billionaires are far lower than the tax rates that many teachers, accountants and plumbers pay each year. If Musk, whose wealth is currently estimated at $716 billion, had to pay a 5 percent wealth tax, he could probably get by with $680 billion, enough to buy Ford, General Motors, Toyota and Mercedes. Still He remains the richest person in the world. (However, it is safe from California taxes; a few years ago Move to Texas.)

California politicians, including Gov. Gavin Newsom, are Generally opposed To the initiative. A glaring exception is Rep. Ro Khanna, who told WIRED in a statement that he supports “a modest wealth tax on billionaires to deal with staggering inequality and make sure people have access to health care.”

Khanna may or may not pay the price for taking on the wealthy It is the main challenge supported by the money of the few Because of that. The safest position for Bay Area politicians is the one taken by San Jose Mayor Matt Mahan. He recently posted a set of tweets opposing the bill, saying that if California passed a wealth tax, it would cut off its nose out of spite. When I spoke to Mahan, he emphasized the danger of California standing alone in taxing the net worth of billionaires. “It puts at risk our innovative economy, which is the real engine of economic growth and opportunity,” he says. (Mahan is not super-rich, but he is a billionaire next door: he was once the CEO of a company a company Co-founded by former Facebook CEO Sean Parker.)

Because of the mobility of the wealthy, California has real concerns about the impact of the state’s wealth tax. Not being a billionaire, I find the idea baffling – walking away from the perfect home just to avoid a tax that doesn’t affect your living situation seems, to use Mahan’s words, like cutting off your nose to spite your face.

I also don’t understand why the departure of billionaires necessarily means the end of Silicon Valley as the heart of technological innovation. If you want it becomes Billionaire, there’s no better place than the Gulf, with an ecosystem that nurtures innovative businesses. This does not change. A few years ago, some tech workers moved to Miami, claiming it would become the new Silicon Valley. Which It didn’t happen.