California wealth tax worries grow: White House AI czar hints at leaving US 'tech capital'
David Sacks, a prominent figure in tech and government, has hinted at leaving California due to a proposed 5% wealth tax on billionaires. This move follows similar sentiments from other wealthy individuals like Pete Thiel and Larry Page, who are reportedly considering disassociating from the state.
White House AI and crypto czar David Sacks has hinted at leaving California amid the state’s pro[posed “wealth tax”. The former chief operating officer of PayPal shared a post on microblogging platform X (formerly Twitter), where he said “To be clear, the Billionaire Tax Act in California is not (just) an unrealized gains tax.
It’s a 5% across-the-board confiscation of net worth. It applies even if one has already realized and paid taxes on the entire amount.” When asked by a user “would you consider leaving”, Sacks replied saying “who said I haven’t”. David Sacks is the third such billionaire who has hinted at leaving California. The state has proposed a ballot measure that would impose 5% tax on residents worth more than $1 billion. According to a report by the New York Times, venture capitalist Pete Theil and Google co-founder Larry Page are allegedly thinking of cutting down their ties to the state before the end of the year.
Billionaires criticize California’s wealth tax
The proposal to introduce a “wealth tax” has received criticism from founders and billionaires. Palmer Luckey, cofounder of Anduril, recently said the tax will force “founders like me to sell huge chunks of our companies" to pay for what he described as "fraud, waste and political favors for the organizations pushing this ballot initiative.”“I made my money from my first company, paid hundreds of millions of dollars in taxes on it, used the remainder to start a second company that employs six thousand people and now me and my cofounders have to somehow come up with billions of dollars in cash," Luckey wrote in an X post.
Echoing the same concerns, billionaire investor Bill Ackman said California is “on a path to self-destruction” if the measure moves forward. In an X post, Ackman wrote: “Hollywood is already toast and now the most productive entrepreneurs will leave, taking their tax revenues and job creation elsewhere”.Even California Governor Gavin Newsom has opposed the bill. Speaking at The New York Times DealBook conference, he said “It's not something to be panicked about, but it's part of the broader concern and narrative that's developed in this country of the haves and have-nots, not just income inequality, but wealth inequality”.