The fight over California’s proposed “billionaire tax” is getting weird. This week, it was revealed that someone is planning a so-called “Billionaires’ March” in San Francisco as tech elites continue to hate each other over this much-maligned bill. A website promoting the event appeared online, but it offered little other than a meaningful tagline: “It’s fashionable to vilify billionaires. Losing a billionaire is expensive.”
The immediate reaction was disbelief, with most people thinking the site was some kind of bizarre hoax. “This is a joke/satire, right??” one social media user wrote shortly after the news broke. But now the person believed to be the organizer of the event has revealed that the march is no joke and is scheduled to take place this coming Saturday.
The San Francisco Examiner first reported that the event’s organizer was revealed to be Derik Kaufmann, founder of AI startup RunRL, which previously participated in Y Combinator’s accelerator program. Mr. Kaufman told the Examiner that the event was not sponsored or sponsored by any outside organizations or large fundraisers or corporations, and that he was the only participant.
In a conversation with TechCrunch, Kaufman (who also told the Examiner that he is no longer involved with RunRL) acknowledged that the impetus for the upcoming rally is California’s proposed wealth tax, which the tech founder believes would “do significant damage to the tech economy.”
The policy in question, the Billionaire Tax Act, introduced last year, would require Californians with assets of $1 billion or more to pay a one-time 5% tax on their total assets. Some experts say the bill, backed by the state’s health care union SEIU (Service Employees International Union), could help pay for critical public services and help the state make up for recent federal funding cuts. Nevertheless, the policy has sparked loud protests from some of the tech industry’s most prominent figures, many of whom have threatened to leave California or have already left. It also led to a monsoon of lobbying efforts in the California state legislature to reject the bill.
When asked why he opposes the bill, Kaufman expressed concern about how it could affect Silicon Valley’s startup economy. “This tax in particular has a fatal flaw,” he said. “This hits startup founders who only have assets on paper. They are forced to liquidate their shares on potentially unfavorable terms, face capital gains taxes, and relinquish control. Not to mention the difficulty of valuing private companies.”
“Many founders will see significantly disproportionate tax bills,” Kaufman continued. “Furthermore, there is no precedent for this type of comprehensive wealth tax in the United States. Sweden abolished its comprehensive wealth tax 20 years ago to avoid capital flight and encourage entrepreneurship, and now has 50% more billionaires per capital than the United States.”
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Online conversations about Kaufman’s planned event continue to alternate between incredulity and ridicule. One social media user said of the incident: “I can’t imagine billionaires marching in the streets.”
That person is probably right.
Kaufman told TC that he is not aware of any actual billionaires planning to participate in the march organized in their honor. Kaufman said the event would likely include “dozens of attendees,” but stressed that it’s not clear how many people will actually gather.
The continued outrage over this bill is a little strange, given that it has long been known that it had little chance of passing. That’s because California Governor Gavin Newsom has already said he intends to veto the bill if it passes in any form.
