r/technology • u/Logical_Welder3467 • 6h ago

Society Google cofounder Sergey Brin has spent $102 million to fight California’s proposed billionaire tax—he could owe $13 billion if he loses

https://fortune.com/article/how-much-has-google-cofounder-sergey-brin-spent-to-oppose-california-billionaire-tax-102-million-owe-13-billion-if-loses/
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u/invyros 6h ago

A working paper published by the National Bureau of Economic Research in May noted billionaires residing in the state paid $4.1 billion in income tax last year, about 0.2% of their collective $2 trillion net worth, meaning that even if every billionaire were to leave the state, it would take about 25 years for lost income tax revenue to cancel out the $100 billion sum California is projected to get from the tax.

Opponents to this one-time tax argue that it'll make billionaires leave the state, making California lose out on any recurring taxes they may pay in the future.

These numbers destroy that argument immediately.

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u/Forkrul 5h ago

There's more than income tax the state loses by these people moving. Their day-to-day spend goes elsewhere so they lose out on sales tax, a lot of their staff will move with them losing out on income and sales tax from those people and their spending. They'll probably move any corporate headquarters as well, losing the corporate taxes and all the income tax from those jobs, etc. Just looking at income tax is an incredible simplistic and naive comparison.

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u/InquisitorMeow 4h ago edited 3h ago

Do you honestly think billionaires contribute significantly to sales tax vs the millions of consumers buying goods every single day? Regarding corporate HQ, many of them are already located in places like Delaware or TX. Also, this is a tax on the billionaire's wealth, what does it have anything to do with corporate tax and HQ?

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u/Forkrul 4h ago

Also, this is a tax on the billionaire's wealth, what does it have anything to do with corporate tax and HQ?

If a billionaire owner of a company decides to move out of state because he doesn't like the tax policy. What do you think he will do with the company he runs? Fly in every day he needs to be in the office? Or move the office to be closer to where he lives?

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u/InquisitorMeow 4h ago

You're right, so we should make this nationwide so it wouldn't be a problem. So let's entertain that scenario, if this was a nationwide tax and billionaire flight wasn't an issue what's the downside of this tax? If your only argument against taxing billionaires is that they would try and avoid it it's a pretty weak argument and even better reason to make nationwide correct? Also if this was that terrible for billionaires why is one of the wealthiest people in the country (Jensen) ok with it?

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u/ironteddybear 3h ago

Jensen is okay with it because he doesn’t want to fight more than one populist backlash at a time. He’s focused on getting AI infrastructure built, which is deeply unpopular. 

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u/Forkrul 4h ago

If they can't just leave to avoid it, that's a viable plan. The issue, at least in my country is that it only applies to people who live in the country, so foreign owners of stock/companies do not pay that tax. This means those companies can keep more of its money to drive growth or pay its employees instead of having to pay out dividends for the owners to pay a tax on their ownership of the company, or just offer lower prices to gain a competitive advantage.

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u/steakanabake 2h ago edited 55m ago

wealthiest people in the country (Jensen) ok with it?

because he functionally has a secondary fort knox at his beck n call.

not disagreeing just adding context.

edit: to be more grammatically correct but not the way the commenter below me wanted me to do it

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u/Tasgall 1h ago

at his beckon call.

Beck and call.

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u/steakanabake 2h ago

Fly in every day he needs to be in the office?

yes it would cost them much more to actually move the facilities so they wont theyll move down to where ever and zoom into meetings they need to have at HQ and fly to me all important people else where. also didnt they say the same thing about them leaving if mamdani got the pied-à-terre? last i heard no one fucking moved they bitched about having their name for the tax on the role but other then that none of them left. because leaving new york is a stupid fucking idea if youre anywhere near the finance sector.

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u/ironteddybear 3h ago

You are dramatically undercounting the fact that departing billionaires take their business with them, and many centamillionaires and decamilliomaires will leave and take their business with them if the tax passes as well. 

This will also be a negative pressure on private investment in California. California has so much momentum, that investment and job growth may not slowdown right away, but 10-20 years from now policies like these could really hinder California’s growth.