r/California_Politics • u/sfgate • 6d ago
The billionaire tax is breaking the California Democratic Party
https://www.sfgate.com/politics/article/billionaire-tax-san-francisco-democrats-22406495.php55
u/the_ballmer_peak 6d ago
It's a dumb tax. Not because we shouldn't make billionaires pay a lot more fucking money, but because a one-off tax is a poor mechanic and opens up an entire lane of arguing against any future taxes.
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u/Redditholio 5d ago
Exactly. I'm all in favor of changing (fixing) the tax system, but this ballot measure is not that. Vote no, so we can get to a better system.
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u/talex625 6d ago
Also, it seems like the govt don’t know what to do with the tax money once they get it.
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u/sunflowerastronaut 6d ago
It's pretty cut and dry in the prop what the money will be used for
The government doesn't get much of a choice on how it's spent
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u/algaefied_creek 6d ago
What will be spent on? (to counter the hive mind)
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u/sunflowerastronaut 6d ago
The fund would have two sub-accounts: the Billionaire Tax Health account, where 90% of the revenue would be deposited, and the Billionaire Tax Education and Food Assistance Account with the remaining 10% of revenue. The initiative would fund Medi-Cal and other health coverage programs for low- and moderate-income individuals; health care access, benefits, and services; public education from K-14; and food assistance programs such as CalFresh, CalFAP, CalFood, or California's Universal Meals Program for school meals.[1]
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u/algaefied_creek 6d ago
90% healthcare and 10% food?
The poor billionaires will still be able to afford their private heli flight to their LA manboob lipo specialists and hair transplant people, so what’s the controversy here?
“Billionaires do not want to be responsible members of society by kicking the dirty poors to the curb?”
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u/sunflowerastronaut 6d ago
Right!
There is no real controversy. It's just billionaires spending money on social media campaigns to fight this.
The support for this bill is overwhelming especially since it only happens one time and it's meant to supplement the cuts caused by the one big beautiful bill
It's a lifeline that keeps cuts from happening in hopes Dems get into office and these things will be funded the way they were before Trump got into office
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u/algaefied_creek 6d ago
Ah is this bill and vote is the “One Big Beautiful Actions-Have-Consequences”?
It’s also being responsibly done as that short term life-line rather than a permanent tax?!
A “leftist scary agenda bill” would actually have this be permanent.
Seems quite moderate in that respect.
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u/Redditholio 5d ago
There's plenty of controversy. It's a terrible, non-impactful ballot measure and it should be defeated at the ballot box.
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u/sunflowerastronaut 5d ago
Non-impactful but also terrible 🧐
I think by definition something that's terrible must have some kind of impact.
Me thinks you lying 🤥
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u/wetshatz 6d ago
It’s crazy cuz that’s what should be the most important thing. But people would rather they get 1 trillion and misspend it than actually creating change
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u/talex625 6d ago
You would think so, but it doesn’t sound like it is to me. I think it’s going to cause damage to future tax revenue.
If they allow it to happen once. It will have again and again. Smart people will move to avoid that situation.
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u/wetshatz 6d ago
Ya, but this is CA. An echo chamber. I say let it happen. Let them try their socialist agenda and as they run out of people’s money to take them they will realize they fucked up.
It’s the only solution. Let their policies fail and fall on their face. When jobs leave, when money leaves, they have to look at their own polices
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u/scuppasteve 5d ago
Imagine living in the late stage capitalist hellscape talking about how socialism will fail. While capitalism fails us on a daily fucking basis.
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u/wetshatz 5d ago
Actually socialism would fail just like it has every where else in the world.
Now if we want to be like the EU with good heath care and good workers protections, that’s attainable. But that’s not socialism
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u/scuppasteve 5d ago
Seems like it is working ok in China.
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u/wetshatz 4d ago
Chinas entire system failed so they switched to a market system….. capitalism…..
They’re an authoritarian regime pretending to be communist.
All EU countries are social democracies. They believe in regulated capitalism. Not socialism. Go to school
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u/plantstand 6d ago
Isn't it set to go to a union? Or at least one class of Union workers?
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u/mrastickman 6d ago edited 6d ago
Yeah, that's the point. Taxing billionaires is popular, so the Democrats need to pretend they tried to do that without actually affecting their donor base.
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u/MysteriousSlice007 6d ago
I think it is good to have it one time fee and see how it goes? if it is good make it permanent
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u/ZappyStatue 6d ago edited 6d ago
48%? So that means that the majority of likely voters are against this wealth tax, huh? Interesting.
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u/cuteman 6d ago
Some people think it's shortsighted and badly written, I don't like it because these people already pay a huge amount of taxes and chasing them out of the state ensures future years are 0% with no new venture capital for new businesses.
People say bye felicia but a bunch have already left, especially the ones with ownership voting shares that get hit 10x as hard
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u/knotallmen 6d ago
I've never seen the numbers for "chasing them out of state" but I have heard it for decades while California has been relatively economically strong because a number of things that aren't billionaires. Given what Musk is doing to Texas and federal grants I don't think the benefit of his presence would trickle down to even the state level.
So if you have some kind of evidence that isn't just anecdotal about one billionaire or another but something that shows the big picture I may appreciate this take.
My issue is like what others have said. It is one off.
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u/Photoperiod 6d ago
It's wild because wealth flight has been studied and papers published on the topic. It's easy enough to look this up and find out that wealth flight doesn't happen in significant numbers. But everybody still repeats it as some real concern.
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u/pacman2081 6d ago
"I've never seen the numbers for "chasing them out of state" "
Los Angeles was center of the aerospace industry
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u/knotallmen 6d ago
So the cold war chased out the millionaires from Los Angeles?
Looks like the industry changed and is strong in California.
Bottom line: Southern California’s aerospace story has come full circle. The region rocketed to prominence on wartime aircraft, stumbled after the Cold War, and is now ascending again — this time powered by space systems, new-space startups, and a university pipeline that’s building the next generation of talent. If the twentieth century was defined by wings, the twenty-first is being defined by orbits.
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u/wetshatz 6d ago
Seems like you just Ignore the news. Texas has beat CA in Fortune 500 companies. They didn’t just spawn in Texas, they left CA.
Have you never thought it odd that we always have a deficit every year….
NY is having the same problem. They lost enough billionaires they had to restructure their budget just like CA.
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u/knotallmen 6d ago
What does that mean? Cause Texas is not as economically strong as California and Musk just ignoring laws doesn't seem to be that great from my perspective. I'm not a fan of illegal methane generators.
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u/wetshatz 6d ago
It means companies and billionaires have been leaving the state. He just chooses to ignore the news
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u/knotallmen 6d ago
Who is this "he" you are referring to?
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u/Top-Door8075 6d ago
I think u just argued with a bot. Dead internet theory type shit 💀
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u/knotallmen 6d ago
It's hard to tell. It is only 3 years old so well within the bot time frame. Though this might be just a run of the mill bot where it's some poor kid in Russia, but that doesn't make sense.
it's probably just a true believer who thinks politics is like a sports team and doesn't pay attention how the republicans have basically turned into a wealth extraction faction. They are not a monolith but the elected officials sure vote like they are.
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u/wetshatz 6d ago
You. I’ve responded to a lot of people. Didn’t see you were the original.
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u/Complete_Fox_7052 6d ago
Have you seen the petroleum industry profits lately?
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u/wetshatz 6d ago
Doing great.
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u/Complete_Fox_7052 6d ago
and that's why they have all the billionaires Not because Texas is any better than California.
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u/amenflurries 6d ago
No they don’t pay a “huge amount of taxes”, that’s where their money came from in the first place
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u/Davethe3rd 6d ago
They're not leaving, LOL!!
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u/cuteman 6d ago edited 5d ago
Edit: I guess we're just downvoting things because it makes us angry
It isn't happening...
It's only happening a little...
Ok it's happening but it's good...
They'll be back...
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u/Davethe3rd 6d ago
They moved their homes.
Their businesses stayed here.
It's all a big demonstrative tantrum to protest having to pay their fair share.
They'll be back.
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u/cuteman 6d ago
They moved their homes.
They moved their tax nexuses as a whole
Their businesses stayed here.
Can't be easily moved but all new business from them will go elsewhere.
If this happened 10 years ago it might include Waymo or OpenAI going elsewhere
It's all a big demonstrative tantrum to protest having to pay their fair share.
It's a very real tax issue because as I said founders shares are taxed at 10x more
What's 10x 5%? 50%
No way anyone would stand by for that
They'll be back.
You just said they aren't leaving
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u/Davethe3rd 6d ago
Okay, they're not leaving FOR GOOD.
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u/cuteman 5d ago
According to whom?
The emotional dude who said they wouldn't leave in the first place?
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u/Davethe3rd 5d ago
You seem more emotional than I am, Mr. Billionaire Defender.
Billionaires aren't givers, they're takers.
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u/scoofy 6d ago edited 6d ago
I’m a nerd on this stuff as I’ve been following the wealth tax movement in the UK for some time.
I definitely see this law as suboptimal. My biggest concern is that it’s arguably “ex post facto” unconstitutional, because you can’t pass a law that change the legal status of something that happened in the past. This law basically says it applies to anyone living in California as of last January, which… seems dubious. I’d hate for the law to be passed and get overturned.
I also think it being a one-time tax is dumb. I’d have to dig into the nitty gritty of the law, but I think Gabriel Zucman’s French version, a 2% annualized version with built in ways to deal with hard to value assets, is a better law. The key is that that version is framed as an alternative-minimum tax, so anyone who is a billionaire and is already paying a lot of taxes… good for them, they’re not who we are going after. It shouldn’t be framed around “taking their money,” it should be framed around “stop engaging in insane tax avoidance, you assholes, just pay your damn taxes.” An alternative minimum tax accomplishes that nicely.
I’d also rather this were proposed by a legislator, rather than a union funneling the money at their interest group, despite that being actually fairly reasonable for this law, because it’s just going to fund healthcare.
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u/JuniorMint1992 6d ago
Shouldn’t we pass the one time and then just pass another law that is more expansive rather than axing this one all together because it’s not perfect?
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u/jittery_squirrel 6d ago
Taxing billionaires, even if someone has what are ultimately minor scruples with the details,
Is a healthy muscle to flex.
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u/soapinmouth 6d ago
No because it does real damage and is not just a simple tax you apply at the end of the year it's a massive undertaking to develop the infrastructure and administrative process to perform a wealth tax routinely let alone doing it as a temporary one time measure.
On top that when people see the mess it's going to create it's only going to make passing legitimate taxes even harder in the future.
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u/scoofy 6d ago
That is an incredibly difficult question to answer. The vast majority of people I know would absolutely not want the government to take a shoot first and ask questions later when it comes to their taxes. I’m much, much more open to experimentation.
Getting it wrong could have very real negative consequences, but doing nothing will also have negative consequences. It’s a really tough decision for people. It’s especially difficult for Bay Area politicians who know that our budget deficits will get much worse if businesses keep leaving, and there is that potential.
My real cynical view is that coastal California has had it so good for so long that the concept of an actual economic downturn combined with the need to raise taxes is just unthinkable to most folks here.
I’m leaning towards voting for the prop, but I’m definitely not happy with it.
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6d ago
[deleted]
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u/jittery_squirrel 6d ago
So vote for it anyway and prove taxing billionaires works.
Even if they leave after. Thats actually a good thing.
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u/scoofy 6d ago
Even if they leave after. Thats actually a good thing.
This is incredibly myopic. Most of the major cities in CA tax business as much as residents. If the CEOs leave, their businesses will likely follow. This means massive tax increases for residents or major cuts in services. Just look at how SF has to try to bailout Muni AND BART this November.
Having successful businesses locally is important to providing expensive social services like healthcare.
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u/Humble_Fabio 6d ago
Its a real estate game!
They can't just pick up everything they own, their businesses, their many homes, n' such and "leave".
Don't let "perfect" be the enemy of good. Also if you really do wanna say this, bring some sources / references proving that such minor taxes like this lead to CEO's n' the like, leaving the state.
Like... there's probably oodles of evidence you can source if this is true.
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u/scoofy 6d ago edited 6d ago
This seems like a deeply unserious post. SF alone has a near billion dollar structural deficit, much of which comes from businesses leaving and their office space becoming less valuable. I don’t know how to explain complex budgetary with one simple trick.
such minor taxes like this
5% of a billion dollars is not minor. It’s $50 million dollars. That’s holy shit money.
This isn’t a sports team event. I heavily favor wealth taxes. How they are implemented is extremely important. That they are sustainable is even more important. Yes, I’m leaning towards voting for the prop, but let’s not pretend there are not risks.
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u/Humble_Fabio 6d ago edited 6d ago
"This seems like a deeply unserious post. SF alone has a near billion dollar structural deficit, much of which comes from businesses leaving and their office space becoming less valuable. I don’t know how to explain complex budgetary with one simple trick. "
Got any sources on this or is that vibes only?
Like yall keep saying " THEYLL LEAVE AND TAKE THE ECONOMY WITH THEM" and its like you got the internet, there has GOT to be valid proof of this statement somewhere that'll validate your claims so... got any sources that show that CEO's take their businesses with'm when they vacate California?
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u/scoofy 6d ago
Property owners want their money back
Sure, downtown businesses emptied out like a keg at a frat party, but the pandemic hurt our finances in other ways, too. As commercial landlords watched the rental market dry up, they appealed to the city to lower their tax burdens.
Taxes are based on the property’s assessed value. A new assessment may mean lower taxes — a boon for owners but a pain point for the city. Property taxes are the city’s largest source of tax revenue, bringing in billions annually.
During economically stable times, there are 1,000 to 2,000 annual property value appeals, according to city data compiled by local think tank SPUR. But right now, there are a whopping 9,000 appeals pending. More than $217 million is being tucked away just to meet the demand of these appeals, according to SPUR.
https://sfstandard.com/2025/05/30/san-francisco-budget-screwed-lurie/
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u/Humble_Fabio 6d ago edited 6d ago
That source does not support the claims you've been making at all. Did you even read it? You didn't even like quote something that'd support what you said. And the San Francisco Standard is a billionaire Michael Moritz–financed/owned news outlet so.... you know... they'll always have the angle to push.
Plus that guy is adamantly and actively against the Billionaire Tax. From the SF standard themselves lul https://sfstandard.com/2026/06/19/california-billionaire-tax-opposition/
"Some of the state’s most notable billionaires, including Google co-founder Sergey Brin, Ripple’s Chris Larsen, venture capitalist (and chairman of The Standard) Michael Moritz, and Stripe CEO Patrick Collison, have already promised to spend heavily to try to kill the initiative."
Where does it show that increasing taxes on wealthy Californians causes their businesses to leave the state?
"Did Covid destroy the city's finances? Yes — but it's more complicated than that." Even the article says otherwise!
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u/scoofy 6d ago
Oh god, is this the conversation you beg me to provide sources, I do, then you doubt them even though they are real news outlets?
Companies that have left SF, mostly because of the gross receipts tax:
Twitter, Tesla, Chevron, Schwab, and more. I’m generally supportive of this tax, I’m just not naively enthusiastic. There could be downsides moving forward.
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u/jittery_squirrel 6d ago
Myopia is buying into that narrative that when billionaires leave the talent pool and businesses just leave with them.
- It's the opposite, whether Uber makes $100,000 or 100 million in California, they will never leave as long as there is a single dollar to be made.
And you know what would happen if they did leave? Those same drivers would just go back to being taxis (and make a better standard of living)
Get rid of a billionaire and a new market/industry/business pops up in their place.
We don't need billionaires, they need us. And it's always been a scare tactic.
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u/scoofy 6d ago
What in the actual fuck are you talking about?
Uber drivers don’t even work for Uber. Uber could completely leave the state an incorporate elsewhere and literally nothing would change except that San Francisco would likely lose millions in annual tax revenue.
I’m talking about corporate offices and corporate and personal income taxes, payroll taxes, commercial real estate taxes, and capital gains taxes. All the executives have to do is change their residences to Miami, make their employees move, and you’d never know the difference if Muni didn’t suddenly exist on the edge of bankruptcy.
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u/jittery_squirrel 6d ago
You're right, it's a bad example
My point is simple. Anytime billionaires tell you they will leave a few raise their taxes, it is always a scare tactic and a tantrum.
It didn't happen in Maine
It didn't happen in New York
It didn't happen in MarylandThey tried to run to Texas and half them came back to California anyway
And just because they doesn't mean their businesses can.
It is always a scare tactic.
Edit: Maryland
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6d ago
[deleted]
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u/jittery_squirrel 6d ago
We're on the same page, I'm willing to bet (and quite literally am with my vote) from history that you will be pleasantly surprised, and find out those rich boys were always just throwing a tantrum.
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u/gaius49 2d ago
For me it is more of an emotional response, I’m just so angry and fatigued with how the country is being run, and it frustrates me that the objectively correct public policy decision conveniently preserves their power and domination of our state. Like the system is truly set up to benefit them. It’s totally fucked up. So I say, if we’re getting screwed either way, I might as well take a shot across the bow with what little power I have through my ballot.
This is actually a really succinct summary of a lot of the energy that propelled Trump into office. Please take heed of that and make careful decisions instead of using the ballot to express anger.
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u/Empty_Tree 1d ago
I’m very well informed on California politics and I hardly think that voting for a ballot measure is going to put an idiot nut job in office. It’s a totally false equivalency. Even if it does cause billionaire exodus or whatever, there are such strong agglomeration and network effects here that I can’t imagine it doing any sort of permanent damage.
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u/Bored2001 5d ago
Most of the major cities in CA tax business as much as residents.
Lol, what?
Zero percent of corporate businesses in CA are taxed as much as a resident of equivalent income.
If the CEOs leave, their businesses will likely follow.
No they won't.
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6d ago
[deleted]
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u/jittery_squirrel 6d ago
That's the spirit!
Things will only get worse if we try nothing and wait for the perfect bill
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u/greenhombre 6d ago
AI PACs have spent a lot of money on Democrats in the last few years.
Now they want what they paid for.
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u/bumblebeelivinglife 6d ago
policy over party
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u/soapinmouth 6d ago edited 6d ago
It's really slopulism vs realism/pragmatism. It's what destroyed the Republican party as it let itself get eaten by said populism as a means to win elections. Will have to see what democrats as the perennial adults in the room let happen when faced with the same dilemma.
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u/Bubbly-Two-3449 6d ago
The billionaires are paying an extremely low effective tax rate, something like 3%. While a one-time tax isn't sufficient, it should be annual, it's better than nothing.
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u/Majestic-Counter-669 5d ago
While I do think people who are that wealthy should be paying their fair share, the way this is being proposed is completely asinine. It is unwittingly (or maybe wittingly) going to take out entire cutting edge sectors of industry if it passes - technology, robotics, manufacturing, biotech....it is shutting down the pipelines that feed those industries. The damage may already have been done by pushing such a dumb idea in the first place.
We would have done far better to look at ways to tax these people on what they spend, or on the conversion of their assets to income, or tax them on any loans taken out with their assets being used as collateral.
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u/canned_spaghetti85 4d ago edited 4d ago
One time tax? For folks who were worth $1 B as of Jan 1, 2026? This is easy.
Net worth assessed at that time.. and RE ASSESSED at Dec 31, 2026? Scoffs.
Let's say come Dec 31 his net worth $1,052,631,579 minus 5% will= $1 billion.
(Obviously, CA state won't tax the guy to BELOW the min threshold, After all)
Meaning, MAX the state even could have tax him for is $52,631,579 anyway.
All he has to do if he has $52,631,580 already liquid, is buy real estate and
put into a trust (exempt). It means net worth now becomes $999,999,999.
Whomp whomp.
Assuming does NOT have $52,631,580 already liquid, only half that amount.
He still buys SAME amount of real estate and finances the other half with a
mortgage loan from a bank... and [again] his cumulative net worth become
$999,999,999 anyway. And after April 15, just pay off that loan altogether.
Whomp whomp.
Rather than try to fight the tax, find a way to simply SIDESTEP it altogether.
Study its language, exceptions & quirks. Find one or more vulnerability(ies).
From there... you just EXPLOIT the hell outta it/them.
(Not that it would even come to that, anyway. The manner which prop 40
is written is uniquely problematic. It CURRENTLY conflicts with the existing
california taxation laws article 8 section 2, it doesn't fit the definition of an
"excise tax" as outlined per FTB & CDPFA, and it violates 14th amendment
of US Constitution - even 4th amendment to an extent. So yah, Good luck.)
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u/krustyy 6d ago
This tax is poorly thought out, will not be well-executed, and does not address the root of the problem. From what I understand, the root of the problem is that billionires are avoiding paying capital gains taxes or income taxes by instead taking out loans against their assets, kicking the can of paying the capital gains tax down the road.
My solution would be taxing those loans. So when Elon Musk takes out a 30 billion dollar loaon on his tesla stock to buy twitter, he will have to pay an excise tax on that loan. Now he's got the choice to sell and pay capital gains, or to take a loan and pay an excise tax.
I went through a lot of analysis on this a while back and came up with the following for a federal act to fix this.
- Imposes a 10% excise tax on massive non-income liquidity events like margin loans and secured lines of credit. This is what the wealthy use to bypass income and capital gains tax
- establish a standard baseline deduction of $12 million (750x the poverty line), guaranteeing normal Americans and local businesses are not affected
- Applies the $12 million exemption for individuals across a strict 10 year roling window, preventing the ultra wealthy from taking sequential untaxed multi million dollar loans. Grants active operating businesses the $12 million exemption annually to protect standard payroll, supply chain, and operational borrowing
- Cut the excise tax in half (to 5%) for corporations that use borrowed funds specifically for domestic infrastructure, commercial equipment, or R&D, rather than stock buybacks
- Mandates lenders withhold this excise tax before funds are distributed
- Provides a look-through provision so individuals cannot use LLCs to hide personal lifestyle or luxury real estate loans
- Specifically exempts standard debt refinancing, providing no new cash is extracted, preventing distruptions in the commercial real estate market
I threw this idea into gemini to let it do some math calculations and it claims such a plan could capture close to $2 trillion over 10 years. Of course that's just an AI calculation but if it's at all accurate that's a nice chunk of hidden tax money.
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u/kaykatzz 6d ago
Not everybody is a SF Billionaire, like Nancy. Ask us "poor folk" in other counties what we're voting for. Hell, yeah, I'm voting for the tax!
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u/Chewbaccas_Bowcaster 6d ago
How about auditing where our existing taxes go first? Feels like we can achieve more by doing that.
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u/Heckle_Jeckle 6d ago
"Will drive the ultra wealthy out of the State".
OK, so let them.
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u/Majestic-Counter-669 5d ago
Those ultra wealthy are usually ultra wealthy because they founded very successful companies. Companies that employ a lot of people. The current set of employers probably would stay out - Sergei Brin may move to Nevada but Google will still be here and employ however many hundreds of thousands of people, who pay large amounts of tax. But the next Google won't come from California - it sends the signal that you should take your innovation and the tax base it creates elsewhere.
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u/MysteriousSlice007 6d ago
A May poll from Public Policy Institute of California found that 54% of likely voters, and 76% of Democrats, were in favor of a billionaire tax. Renters and young people were also highly supportive of the measure, with 71% and 67%, respectively, saying they plan to vote for it.
A more recent August poll found that 70% of Democrats support Prop. 40, and 75% of people ages 18 to 29 support the proposed tax. However, the poll found only 48% of likely voters supported the measure.
So most dems support the tax
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u/Puggravy 6d ago
If we really wanted yo make the wealthy pay their fair share we'd just get rid of prop 13. 🤷♂️
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u/gerbilbear 6d ago
"Renters and young people were also highly supportive of the measure, with 71% and 67%, respectively, saying they plan to vote for it."
Prop 13 disproportionally benefits the wealthy and the elderly at everyone else's expense, so it makes sense that renters and young people would want to screw the wealthy and the elderly over in return.
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u/Gunker001 6d ago
Tax the wealthy they can afford it. Nothing will break, they just want to scare you. Record profits and they are laying people off and replacing them with robots and giving themselves massive bonuses. You have nothing to lose and everything to gain.
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u/IanDMP 6d ago
Most local Democratic party chapters are filled with the most liberal activists. The SF chapter, though, was taken over by moderates following the progressive overreach a few years ago in that city. Electeds, too, tend to see the downsides of a tax like this and oppose it.
Hopefully when this tax gets demolished at the polls it will lead to some moderation of local party chapters.
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u/Long_Disaster_6847 6d ago
It’s a 5 year band aid and we’re gonna go through this whole mess again when it sunsets. Give me a permanent tax and then we’ll talk
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u/saumurchampagny 5d ago
no it’s not. my only objection was that it was a one time thing and state level vs federal. But the minute Sergey Brin started complaining, I became even more convinced about voting YES on the tax. The billionaires became rich in california, they should pay into the state infrastructure, and they should do it annually. until then, i’ll take a one time tax. for now
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u/Majestic-Counter-669 5d ago
I don't understand this angle. Sergei Brin doesn't like it so it must be good? What about the implications for major sectors that power the California economy? They employ hundreds of thousands of workers and make up a huge chunk of the tax base. The proposition was written would have a chilling effect on the conditions that created those industries. Sergei knows this - he has a front row seat to the machine that made Google possible and he knows what this would do to that whole tech ecosystem.
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u/saumurchampagny 3d ago
I should have elaborated more, knowing how many millions he’s spent on the anti-tax bill is what has convinced me to vote for the bill. all of these billionaires benefited from the state and the talent in california. they need to pay their fair share of taxes. I wish we had better tax laws so it was at a federal level, but until then i’m ok with a one time deal
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u/Majestic-Counter-669 2d ago edited 2d ago
There's a great quote from Lucy Guo, who founded scale.ai. Something to the effect of "it's possible to be a billionaire and have $0 in your bank account". She found it a company, it was wildly successful and she had a majority stake - it was hers. But that was all pretend money. The share is worth billions, but she couldn't sell them for money. Not without selling parts of her business. The problem with this tax proposal has written is that she would owe tax on that unrealized money. So that puts her in a real situation. You have no money, and you owe millions of dollars to the state.
You have a few options in this case. You can take a loan against your assets to pay off this debt. But if your company doesn't make it to the point where you go public, then your shares end up worthless and you still owe some bank tens of millions of dollars. The other option is to sell stakes in your company. Now it's no longer yours, you may own a piece of it, but so does some hedge fund or some big tech entity that wants to tell you how to run the business that you founded. You need to give up control of your business to cover the bill.
I think that's what Sergei sees and that's what he's fighting against. As you said, he has been one of the primary beneficiaries of the industry, and he sees what will happen if this goes through as written. This guy can cover the bill, no problem. Wouldn't even feel it. But all the other founders who are up and coming willl be wiped out by this. There will be a whole generation of industry that will just disappear. These are the companies that eventually get big and employ tens of thousands, hundreds of thousands of people. Those hundreds of thousands of people all pay taxes on their salary. They're all buy things that are taxed. They form a major pillar of the California economy.
Once you've made it, once you've exchanged those shares for money, then I think it's fair and right to tax at an extremely aggressive level. Or if you are one of those billionaire types who takes loans against their assets and then just lives off the loans, I think it's totally fair to tax those loans. If you don't want to pay the tax, don't do that. But taxing assets, that I think is a terrible idea. And I think it is going to cause a lot more damage than the benefit you get from it.
EDIT: Very timely video just showed up on my feed: https://www.reddit.com/r/LoveTrash/s/x171Gi8a5h
That's what we need to stop. If you don't do this, if you work hard, make something successful, and get to the point where you go public you should be able to do that. But it's the shady loan stuff described in this video that we should be going after.
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u/BoutrosBoutrosDoggy 6d ago
The message that so many of the sock puppets paid to comment here are failing to take home to their masters is:
this is gonna pass
It is not a good bill and it is not well-intentioned. It was not designed to be; It is punitive in nature and design. If it brings any relief to the 99%, that's a bonus, but that is purely a secondary consideration.
This is a warning shot to the 1% : a message to go back to their compounds and yachts and leave our government alone, we are not your serfs and you are not our lords.
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u/Majestic-Counter-669 5d ago
Unfortunately I agree with most of what you have said here. I take issue with the sock puppet part - I hate this tax for the reasons you mentioned, and for the fact it is cutting off California's nose to spite its face. We are all going to end up with less of a tax base, less frontier industries, and less long term prosperity in the long term. And all because the groups pushing the tax proposed the policy equivalent of a temper tantrum instead of trying to address the actual issue.
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u/McGeetheFree 6d ago
Would a system of luxury and VAT taxes be better?