Did California lose Larry Page? The founder of Google and Alphabet, who stepped down from day-to-day operations in 2019, has seen his net worth rise in the years since—from about $50 billion when he left to an estimated $260 billion today. (Leaving his job apparently didn’t hurt his wallet.) Last year, a proposed ballot initiative in California threatened billionaires like Page with a one-time 5 percent wealth tax—prompting some of them to consider leaving the state before the end of the year, when the tax, if passed, would roll in repeatedly. Page seems to be one of those rebels; The Wall Street Journal reported that he recently spent more than $170 million on two homes in Miami. The article also revealed that its founder Sergey Brin may also be a Florida man.
The Google boys, who were icons of California, are only two of the nearly 250 billionaires under the scheme. It is not certain that many of them went to Florida, Texas, New Zealand, or the space station. But it’s clear that dozens of talking billionaires and other super-rich people are publicly losing their minds over the proposal, which will appear on the November ballot if it receives about 875,000 signatures. Hedge fund CEO Bill Ackman called it “a disaster.” Elon Musk, the richest man in the world, has boasted that he has paid his taxes, so much so that one year he says his tax book broke the IRS computer.
Still, when measured as a percentage of income, even the top fees paid by some billionaires are much lower than the tax rate many teachers, accountants, and plumbers pay each year. If Musk, currently worth $716 billion, were to pay a 5 percent wealth tax, he would likely be able to pull out a $680 billion nest egg—enough to buy Ford, General Motors, Toyota, and Mercedes. still you are always the richest person in the world. (In any case, he is safe from California taxes; a few years ago he moved to Texas.)
California politicians, including Governor Gavin Newsom, generally oppose the plan. The exception is attorney Ro Khanna, who told WIRED in a statement that he’s riding on “a small wealth tax on the billions to address staggering inequality and make sure people are taken care of.”
Khanna may pay a price for taking on the rich and may face a primary challenge backed by oligarch bucks for him. A safe position for Bay Area politicians is that taken by San Jose Mayor Matt Mahan. He recently tweeted his opposition to the bill, saying that if California passes a wealth tax it will be cutting off his nose for his face. When I talk to Mahan, he emphasizes the dangers of California standing alone in taxing billionaires. “It puts at risk our economy of innovation which is the real engine of economic growth and opportunity,” he said. (Mahan isn’t very rich, but he’s a billionaire next door: He was once the CEO of a company founded by former Facebook president Sean Parker.)
Because of the exodus of the wealthy, California has real concerns about the impact of the state’s wealth tax. Not being a millionaire myself, I find this idea puzzling—moving from one’s personal comfort zone just to avoid a tax that doesn’t affect your lifestyle seems, to use Mahan’s words, like cutting off your nose to spite your face.
Also, I don’t see why the exodus of billionaires means the end of Silicon Valley as the heart of tech innovation. If you want it becomes millionaire, there is no better place than the Bay Area, which has an ecosystem that fosters new businesses. That doesn’t change. A few years ago, some tech people moved to Miami, saying it would be the new Silicon Valley. That didn’t happen.
