Derik Kaufmann, the founder of an AI startup, is organizing a “March for Billionaires” in San Francisco this coming Saturday. The event is in opposition to California’s plan to introduce a ‘Billionaire’s Tax.’ This tax would impose a one-time 5% tax on the total wealth of Californians whose fortunes are over $1 billion. Recently Kaufmann’s initiative has been the cause of much incredulity and ridicule across social media, mainly due to the absurdity of the whole endeavor.
The march is predicted to only attract a couple dozen participants at most. Kaufmann readily admits that there are no billionaires currently committed to the protest. The proposed tax quickly became one of the industry’s most controversial issues, prompting heated opposition from a number of high-profile dot commers. All of these accusations from the tech elites have either sent them packing, or they’ve been working on a threat—taking their ball/IPO and going home to leave California.
This is why California Governor Gavin Newsom is in strong opposition of the disapproval bill. He even made it clear that should it pass he’ll veto it. This wealth tax as proposed would be a first in the United States. It reflects an outdated policy Sweden repealed almost 20 years ago to stop capital flight and promote a culture of entrepreneurship. Sweden is currently riding on 50% more billionaires per capita than the U.S. This statistic has sparked fears amongst critics of what might lie ahead if similar legislation were to be adopted in California.
Kaufmann, who has recently spoken out against the legislation, claims that any impact on Silicon Valley’s vibrant startup economy would be risky at best. He raised the alarm that most founders would be hit with “wildly disproportionate tax bills” if the proposed policy went through as-is.
“This tax in particular is fatally flawed,” – Derik Kaufmann
As expected, the initiative has earned mixed reactions on social media. Many users have taken to the concept of skeptically laughing at and inspiring billionaires to go to war on their behalf. One social media user remarked, “I can’t imagine billionaires marching in the street,” while another asked rhetorically, “this is a joke/satire right??”
Kaufmann’s website highlights a key argument: “Vilifying billionaires is popular. Losing them is expensive.” This short sentence captures the essence of the political and ideological battle raging in California right now about money and taxes. Yet tech industry leaders have been raising the alarm that these policies threaten innovation and economic growth.
As Kaufmann gets ready for the march, he wants to educate people. He thinks a grave threat hangs over the unique entrepreneurial spirit that has made Silicon Valley so special. The new tax would only affect the ultra-wealthy. This unusual shift comes with some big implications that could fundamentally change the direction business development takes in California.
