Silicon Valley Billionaires Panic Over California’s Proposed Wealth Tax

Did California lose Larry Page? The Google and Alphabet cofounder, who near day-to-day operations successful 2019, has seen his nett worthy soar successful the years since—from astir $50 cardinal astatine the clip of his departure to determination approximating $260 cardinal today. (Leaving his occupation intelligibly didn’t wounded his wallet.) Last year, a projected ballot inaugural successful California threatened billionaires similar Page with a one-time 5 percent wealthiness tax—prompting immoderate of them to see leaving the authorities earlier the extremity of the year, erstwhile the tax, if passed, would retroactively footwear in. Page seems to person been 1 of those defectors; The Wall Street Journal reported that helium precocious spent much than $170 cardinal connected 2 homes successful Miami. The nonfiction besides indicated his cofounder Sergey Brin besides mightiness go a Florida man.

The Google guys, formerly California icons, are lone 2 of astir 250 billionaires taxable to the plan. It’s not definite whether galore of them person departed for Florida, Texas, New Zealand, oregon a abstraction station. But it is wide that a batch of vocal billionaires and different ace affluent radical are publically losing their minds astir the proposal, which volition look connected the November ballot if it garners astir 875,000 signatures. Hedge money magnate Bill Ackman calls it “catastrophic.” Elon Musk, the world’s richest man, boasted that helium already pays plentifulness of taxes, truthful overmuch truthful that 1 twelvemonth helium claims his taxation instrumentality broke the IRS computer.

Still, erstwhile considered arsenic a percent of income, adjacent the large sums paid by immoderate billionaires are mode little than the taxation rates galore teachers, accountants, and plumbers wage each year. If Musk, presently worthy an estimated $716 billion, had to wage a 5 percent wealthiness tax, he’d astir apt negociate to scrape by with a $680 cardinal nest egg—enough to bargain Ford, General Motors, Toyota, and Mercedes, and still stay the world’s richest person. (In immoderate case, he’s harmless from California taxes; a fewer years agone helium moved to Texas.)

California’s politicians, including Governor Gavin Newsom, are mostly opposed to the initiative. A glaring objection is Representative Ro Khanna, who said to WIRED successful a connection that he’s connected committee with “a humble wealthiness taxation connected billionaires to woody with staggering inequality and to marque definite radical person healthcare.”

Khanna mightiness wage a terms for taking connected the affluent and whitethorn look a superior situation backed by oligarch bucks due to the fact that of it. A safer presumption for Bay Area politicians is the 1 taken by San Jose politician Matt Mahan. He precocious posted a tweet watercourse opposing the bill, saying that if California passed the wealthiness taxation it would beryllium cutting disconnected its chemoreceptor to spite its face. When I talk to Mahan, helium emphasizes the hazard of California lasting unsocial successful taxing the nett worthy of billionaires. “It puts astatine hazard our innovation system that is the existent motor of economical maturation and opportunity,” helium says. (Mahan isn’t ace rich, but helium is billionaire-adjacent: He erstwhile was CEO of a institution cofounded by erstwhile Facebook president Sean Parker.)

Because of the mobility of affluent people, California does person existent worries astir the interaction of a authorities wealthiness tax. Not being a billionaire myself, I find the thought baffling—moving distant from one’s perfect location simply to debar a taxation that makes nary interaction connected your surviving concern seems, to usage Mahan’s words, similar cutting disconnected your chemoreceptor to spite your face.

Also, I don’t spot wherefore an exodus of billionaires needfully means the extremity of Silicon Valley arsenic the bosom of tech innovation. If you privation to become a billionaire, there’s nary spot amended than the Bay Area, with an ecosystem that nurtures innovative businesses. That’s not changing. A fewer years ago, immoderate tech radical moved to Miami, claiming it was going to go the caller Silicon Valley. That didn’t happen.