TAX BILLIONAIRES

“Well, I think you summarized it exactly right. 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.”

“Well, I think there's a couple of lessons we can take away from this. One is that the idea of sticking it to the rich is very popular. The other lesson is that it's still really hard to pass and get across the finish line because of all of the particulars involved, because of the way that a tax is structured, and because of how influential the billionaire class is in our society. The third lesson is that because it's so hard, people who want to do this kind of thing need a really broad base of support to push it across the finish line.”

“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 of this year 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 were really influential in the world of investing in technology left. David Sachs moved to Texas and Peter Thiel moved to Miami.”

“So this would place a 5% tax on the net worth of any billionaires who are California residents as of January 1st of this year. 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 their stocks, the jewelry they own, the cars in their garage, the paintings, anything that contributes to their wealth.”

“Well, it was kind of wild. I went to this conference in Orange County a couple of months ago where a bunch of tax advisors 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 six-figure diamond necklace that just reduce the insurance policy to what it's actually worth, because that's what you'll be taxed on.”

“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. So there's a lot of different angles of potential concern and that's also why many of the Democratic candidates who are running for governor have expressed some reservations.”

“For the billionaires and also many tech leaders who are not billionaires but who are aspirational, they see this as an existential threat that it really would set 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.”