California’s long goodbye continues apace, as that state’s leftists are promoting a wealth tax on the rich, to be enacted by ballot proposition. We are only after billionaires, they say. Just give us five percent of your money, they say, and we will be satisfied. We won’t come back for more.
No one believes them.
Now California’s rich are packing up to leave:
Over the last week, I spoke with 21 billionaires about the looming prospect of a wealth tax. We discussed whether they left or are planning to leave California (most of them are), what a wealth tax means for the technology industry, and finally how, if at all, they plan to fight back.
***
The ballot proposition was constructed in such a way that it can technically not solve any of the stated problems it was ostensibly written to address — chief among them, filling a massive budget hole in Medi-Cal (the state’s Medicaid program) following California legislation that guaranteed permanent funding for illegal immigrant health care.
The union that represents health care workers is the main proponent of the wealth confiscation measure.
The futility of the ballot proposition has left most men impacted with a sense that the ballot proposition’s true purpose is to humiliate them, disrupt their personal lives, and hurt their companies.
They are starting to catch on.
Given especially the proposition’s dangerous language surrounding “control,” founders of private companies in particular, with their armies of lawyers investigating this thing, believe the proposition, as written, could actually bankrupt them.
So California’s tech billionaires are abandoning that state for greener pastures, like Austin, Texas:
Three men I spoke with in the largest billionaire Signal chat said they ran an informal poll, and 70% of the chat (around 60 people, not all of whom were billionaires) indicated they would leave the state if the ballot proposition passes. According to that same poll, around 15% have already left the state.
I’ve spoken with around 10% of billionaires in the state myself. Of the 21 men I interviewed, 20 would have been impacted by the ballot measure. All 20 of them, including the Democrats, as well as several of the most committed diehard proponents of revitalizing San Francisco, are now developing an exit plan. (Three have already left.)
Almost all of them have either purchased property out of state or are in the process of buying property out of state now; almost all of them have engaged lawyers to help them navigate what they see as a potentially years-long legal battle; and, among the men I spoke with who are presently running companies, almost all have deployed business ops leaders to focus on opening offices outside of California.
It wasn’t easy to kill California–you might have thought it would be impossible–but that once-great state is committing suicide. It is notable that California’s rich are planning to leave that state even if the wealth confiscation proposition doesn’t pass:
While, without exception, every founder of a private company I interviewed mentioned the ballot proposition’s confusing and confounding “control” language, their focus is generally directed to the overall uncertainty surrounding legislation in the state.
Concern has much less to do with this single ballot proposition than the question of how companies will be targeted in the future, and everyone believes they will be targeted again.
There is also nobody who believes the introduction of architecture for a legalized asset seizure, something we’ve never before seen in this country, will conclude with an exclusive targeting of billionaires over the years to come.
Once the concept is normalized, everyone assumes wealth taxes of this kind will ultimately target every “wealthy” person in the state, with the term “wealthy” redefined in whatever manner leftists find useful from election cycle to election cycle.
“I think 100% of people who are looking at this understand it is being marketed as a one-time thing, but it will not be one time, and it will not only target billionaires. Once the structure is put in place, it is going to expand,” one impacted businessman explained.
***
To the question of whether the asset seizure would ultimately pass, opinions were diverse, but nobody seemed to care. That wasn’t what mattered.That this could happen at all is what mattered.
Most of the billionaires being driven out of California are at least nominally Democrats, and most are not much invested in politics. But the threat is existential:
[E]ven the most thoughtful entrepreneur is simply looking at the letter of the proposal and concluding it may be literally impossible for them to stay in California.
“If this tax actually passes,” said one prominent venture capitalist, “I think the technology industry kind of has to leave the state. Because every person running a company will have to look at the math, and they will think, ‘Well obviously that cannot happen because it will literally destroy the company.’”
California, RIP.
