The battle over California’s proposed ‘billionaire tax’ is getting weirder. This week, amid the tech elite’s continued hostility to a highly vicious bill, it became clear that someone was planning a so-called “March for Billionaires” in San Francisco. A website advertising the event appeared online, offering little context other than a pithy tagline: “Damaging billionaires is popular. Losing them is costly.”
The immediate reaction was one of disbelief and most people thought the site was some kind of bizarre scam. “This is a joke/sarcasm, right??” one social media user wrote shortly after the news broke. But now the apparent organizers behind the event have confirmed that the march will be~ no They said it was a joke and that it was scheduled to take place this Saturday.
The San Francisco Examiner first reported that the event’s organizer turned out to be Derik Kaufmann, founder of AI startup RunRL, which previously participated in Y Combinator’s accelerator program. Kaufmann told the Examiner that the event was not funded or organized by him, not by an outside group or big-money association or company.
Kaufmann, who told the Examiner he is no longer associated with RunRL, confirmed in a conversation with TechCrunch that the impetus for the upcoming rally is California’s proposed wealth tax. The tech startup said the tax would be “significantly detrimental to the tech economy.”
The policy in question, the Billionaire Tax Act, introduced last year, requires Californians worth more than $1 billion to pay a one-time 5% tax on their total wealth. The bill, backed by the state’s health care union, the Service Employees International Union (SEIU), could help pay for critical public services and help the state offset recent federal funding cuts, according to some experts. Nonetheless, the policy has sparked a major outcry from some of the tech industry’s most prominent figures, many of whom have threatened to leave California or have already left. It also sparked lobbying efforts in the California Legislature in an effort to defeat the bill.
When asked why he opposed the bill, Kaufmann expressed concerns about how it could impact Silicon Valley’s startup economy. “This tax in particular is fatally flawed,” he said. “It’s a blow to startup founders whose wealth is only on paper. They will have to liquidate their shares, incur capital gains taxes and give up control, potentially on unfavorable terms. Not to mention the difficulty of valuing private companies.”
“Many entrepreneurs will end up with a disproportionate tax bill,” Kaufmann added. “There is also no precedent for this kind of comprehensive wealth tax in the United States. Sweden repealed its wealth tax 20 years ago to prevent capital outflows and encourage entrepreneurship, and now has 50 percent more billionaires per capita than in the United States.”
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Online conversation about Kaufmann’s planned event continued to swing between disbelief and ridicule. “I can’t imagine billionaires marching in the streets,” one social media user said of the event.
He’s probably right.
Kaufman told TC that as of now, he doesn’t know if any actual billionaires plan to attend the march organized in their honor. Kaufmann said the event would likely include “several dozen attendees,” but stressed it was unclear how many would attend.
The continued outrage over the proposed tax is a little comical. It has been known for quite some time that there is little chance of this bill becoming law. The reason is that California Governor Gavin Newsom has already announced that he will veto the bill if it passes.
