The war on California\u2019s proposed \u2018Billionaire\u2019s Tax\u2019 is getting weird. This week, amid ongoing rancor from tech elites over the much maligned bill, it became apparent that someone was planning a so-called \u201cMarch for Billionaires\u201d in San Francisco. A website advertising the event popped up online, providing little in the way of context other than a pithy tagline: \u201cVilifying billionaires is popular. Losing them is expensive.\u201d<\/p>\n
The immediate reaction was incredulity, and most people assumed the site was some sort of bizarre hoax. \u201cthis is a joke\/satire right??\u201d one social media user wrote not long after the news circulated. Now, however, the apparent organizer behind the event has revealed that the march is definitelynot a joke, and that it is scheduled to take place this coming Saturday.<\/p>\n
The San Francisco Examiner first reported that the event\u2019s organizer had been revealed as Derik Kauffman, the founder of AI startup RunRL, which previously participated in Y Combinator\u2019s accelerator program. Kauffman told the Examiner that the event was not being funded or organized by any outside group, no big monied associations or companies\u2014just him.<\/p>\n
In a conversation with TechCrunch, Kauffman \u2014 who also told the Examiner that he was no longer involved with RunRL \u2014 confirmed that the impetus for the upcoming rally was California\u2019s proposed wealth tax, which the tech founder said he believed would be \u201cquite damaging to the tech economy.\u201d<\/p>\n
The policy in question, the Billionaire Tax Act, was introduced last year, and would require Californians worth over $1 billion to pay a one-time 5% tax on their total wealth. The legislation, which is backed by the state\u2019s healthcare union SEIU (Service Employees International Union), could pay for important public services and help the state offset recent federal funding cuts, according to some experts. Nevertheless, the policy has led to loud protestations from some of the tech industry\u2019s most prominent figures, many of whom have either threatened to leave California or have already left. It has also led to a monsoon of lobbying in the California legislature, in an effort to defeat the bill.<\/p>\n
When asked why he opposed the legislation, Kauffman expressed concern for how the bill could impact the startup economy in Silicon Valley. \u201cThis tax in particular is fatally flawed,\u201d he said. \u201cIt hits startup founders whose wealth is only on paper. They would be forced to liquidate shares on potentially unfavorable terms, incurring capital gains taxes and giving up control. Not to mention the difficulty of valuing private companies.\u201d<\/p>\n
\u201cMany founders would be hit with wildly disproportionate tax bills,\u201d Kauffman continued. \u201cAdditionally, there\u2019s no precedent for this sort of comprehensive wealth tax in the US. Sweden eliminated theirs 20 years ago to avert capital flight and promote entrepreneurship and now has 50% more billionaires per capital than the US.\u201d<\/p>\n
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Online conversation about Kauffman\u2019s planned event has continued to alternate between incredulity and ridicule. \u201cI can\u2019t imagine billionaires marching in the street,\u201d one social media user said, of the event.<\/p>\n
That person would probably be right.<\/p>\n
Kauffman told TC that, so far, he isn\u2019t aware of any actual billionaires planning to attend the march that has been organized in their honor. Kauffman said that the event is likely to include \u201ca few dozen attendees,\u201d although he stressed that he really isn\u2019t clear on how many people would show up.<\/p>\n
The ongoing outrage over the proposed tax is a little funny, given that it\u2019s already been known for quite some time that the legislation has almost no chance of being enacted. That\u2019s because California Governor Gavin Newsom has already stated that, should the bill somehow pass, he would veto it.<\/p>\n
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