Laurel Rosenhall

“So this would place a 5% tax on the net worth of any billionaires who are California residents as of January 1. The money would go into a special fund at the state level and would have to be spent on health care services. It's unusual to tax the assets of a person as opposed to their income. So their assets would be, you know, their stocks, the jewelry they own, the cars in their garage, the paintings, anything that contributes to their wealth.”

“So they started freaking out late last year in advance of this January 1 deadline because the ballot measure says that anyone who was a resident of California on January 1 could be subject to this tax. So at the end of the year, there was a lot of jockeying, and there were a few pretty high profile billionaires who made moves to leave the state to change their official residency. A couple of the founders of Google relocated. Sergey Brin moved to the Nevada side of Lake Tahoe. Larry Page left for Florida. And then also some of the people who are really influential in the world of, you know, investing in technology left. David Sacks moved to Texas, and Peter Thiel moved to Miami.”

“I went to this conference in Orange County a couple months ago where a bunch of tax advisers and wealth managers were meeting, and one of the sessions they had was basically kind of like how to help your clients reduce their net worth. So suggestions that were like, oh, move your Picasso out of your house in Beverly Hills to your house in Aspen, or if you were carrying more insurance than you needed on your wife's, you know, six figure diamond necklace that just reduced the insurance policy to what it's actually worth because that's what you'll be taxed on.”

“And that's why when he does talk about this, he really focuses on his objection to a state specific wealth tax. And he does frequently say, we ought to have a conversation about a national wealth tax, leaving the door open to the idea of a wealth tax if it was applied evenly across the country. It is worth noting that he has opposed many wealth taxes in the past when they've come up in the California legislature.”

“But even though it has a lot of support seemingly from the public, there are a lot of high profile Democrats who have come out against it and a lot of unions who are just sitting on the sidelines. Meanwhile, some of the most influential unions in the state, the teachers union, the umbrella group for SEIU, They haven't publicly taken a position. And privately, they're concerned about the idea of a tax that gets locked up in this special box and doesn't fund the programs that most tax dollars do.”

“For the billionaires and also many tech leaders who are not billionaires, but who are aspirational, they see this as a kind of an existential threat that it really would set a precedent of going after the wealth that people have earned and taxing their possessions in a way that really has never been done before. On the other side, that is also part of the motivation for this thing to really shift the paradigm in how the government taxes wealth and how the government gets people to contribute to society.”

“California has this ballot initiative system that a lot of political actors use as leverage to get what they want out of the legislature and the governor. And so now that this thing has qualified for the ballot, this is a period over the next couple months where there could be some backroom negotiations to try to get this thing off the ballot. Sergey Brin and the committee that he created, they have put money into a couple of ballot measures that would negate the billionaire's tax. And it's possible that those could be used as leverage.”