Silicon Valley titans have been working hard and spending big to defeat California’s proposed wealth tax, but they need to broaden the fight.
According to estimates calculated from public filings, tech godfathers such as Sequoia’s Michael Moritz and Kleiner Perkins’ John Doerr have spent more than $120 million on efforts to stop the tax, a bill for which recently cleared the Assembly Revenue and Taxation Committee and now heads toward the deep-blue Assembly and Senate. Per some recent reports, it has a 70% chance of passing.
Fighting the tax, which would impose a 5% levy on billionaires’ net worth, is definitely a worthy cause.
The policy would be suicidal for a state already hemorrhaging residents, businesses, and revenue. Billionaires who have already fled the state in anticipation of the tax have taken an estimated $1 trillion with them. The tech industry would be hit hardest because the tax could force founders with illiquid wealth to sell a portion of their companies just to pay the bill.
But killing this one ballot measure treats the symptom, not the disease.
Taxes are downstream of politics and politics is downstream of culture. The wealth tax didn’t come out of nowhere — it’s the product of California’s political culture, which Silicon Valley spent decades ignoring, and sometimes actively bankrolling.
Tech needs to invest not only in fighting the tax but also in changing culture that brought it about.
Billionaires should marshal serious resources toward education reform. At most University of California schools, students are required to complete at least one “diversity and cultural competency” class. Those include offerings such as “Queer Crip Lit,” which explores the intersection of transphobia, racism, sexism, ableism and homophobia in culture, and “Decolonize you diet” which focuses on how the racism and sexism of traditional food systems.
To counteract that agenda, tech should fund alternative educational programs and conservative groups and think tanks sharing free market economics and capitalism instead of Marxist ideology.
California’s wealthiest residents should also put real money behind popular, common-sense reforms that poll strongly even in deep-blue California — like passing voter ID laws and ending ballot harvesting, which hands outsized power to organized NGO networks.
Politics is about building a coalition — you can’t swoop in at the last minute and ask people to save you money. You have to fight for them and the issues they care about, too.
It’s also time that tech bigwigs back pro-growth candidates more aggressively, instead of supporting those who aren’t in their best interests.
In recent years, Y Combinator’s Paul Graham, Sun Microsystem’s Vinod Khosla and other techies have lent significant financial support to Democrat Ro Khanna’s congressional bids. While Khanna initially pushed for expanding trade and supporting H-1B visas, he took a hard left turn and is now pushing for the wealth tax.
Likewise, tech executives like Microsoft’s Brad Smith and Adobe’s Charles and Nancy Geschke gave to Nancy Pelosi’s victory fund as she pushed for expanding government reach into healthcare and sanctuary policies.
Now’s the time to invest equal or greater sums on Steve Hilton, who is running for Governor, or Jim Desmond or James Gallagher for Congress.
It’s great that Silicon Valley has finally taken an interest in politics, but it’s doing so too myopically. Techies are speaking out and spending big to stop the wealth tax, a single issue that benefits a narrow slice of y people. But, stopping it won’t fundamentally shift public opinion or the cultural tide. They need to get more broadly involved in the state’s politics.
Changing the culture that made the wealth tax politically viable in the first place could yield a real investment. For an industry obsessed with returns, this should not be hard to understand.
This is an important moment to recognize that, as a quote attributed to Pericles said, “Just because you do not take an interest in politics doesn’t mean politics won’t take an interest in you.”
Indeed, if Silicon Valley doesn’t take a bigger interest in government policy, the next bill will be worse.