About this episode
The episode discusses the implications of the proposed 2026 Billionaire Tax Act in California and its potential impact on the startup ecosystem.
California lets interest groups propose measures for the state ballot. Anyone who gathers enough signatures (currently 874,641) can put their hare-brained plans before voters during the next election year. This year, the big story is the 2026 Billionaire Tax Act, a 5% wealth tax on California's billionaires. Your views on this will mostly be shaped by whether or not you like taxing the rich, but opponents have argued that it's an especially poorly written proposal: It includes a tax on "unrealized gains", like a founder's share of a private company which hasn't been sold yet. This could be an existential threat to the Silicon Valley model of building startups that are worth billions on paper before their founders see any cash. Since most billionaires keep most of their wealth in stocks, any wealth tax will need some way to reach these (cf. complaints about the "buy, borrow, die" strategy for avoiding taxation). But there are better ways to do this (for example, taxing at liquidation and treating death as a virtual liquidation event), other wealth tax proposals have included these, and the California proposal doesn't. It appears to value company stakes by voting rights rather than…
People in this episode
Host: Jeremiah
Topics covered
- wealth tax
- California politics
- billionaires
- startup economy
- taxation
- unrealized gains
Keywords
- wealth tax
- California
- billionaires
- unrealized gains
- startup
- taxation
- Garry Tan
Mentioned in this episode
Organizations: California, Google, Current Affairs
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