Did California Lose Larry Page?
Larry Page, the Google and Alphabet co-founder, stepped back from his daily responsibilities in 2019. Since then, his wealth has seen an astronomical rise, jumping from around $50 billion to an impressive $260 billion today. It’s safe to say that taking a step back from work hasn’t hurt his finances.
Last year, California proposed a ballot that would impose a one-time 5% wealth tax on billionaires, which got some of them contemplating leaving the state before the year’s end, as the tax would be retroactive if passed. Page appears to be among those considering relocation. The Wall Street Journal mentioned that he recently purchased two homes in Miami for over $170 million, hinting that his co-founder, Sergey Brin, might also be eyeing Florida.
These tech moguls—once synonymous with California—are just two of approximately 250 billionaires caught in the crosshairs of this proposal. It’s uncertain how many of them have actually relocated, perhaps to Florida, Texas, or even as far as New Zealand. What is evident, though, is the vocal opposition from many billionaires, particularly hedge fund titan Bill Ackman, who branded the tax “catastrophic.” Elon Musk, the world’s richest individual, claims that he pays so much in taxes that he jokes about breaking the IRS computer!
But here’s an interesting point: even with high tax rates, they often still pay a smaller percentage of their income than many teachers or plumbers. If Musk, valued at approximately $716 billion, were to be subjected to this 5% wealth tax, he would still have around $680 billion left—an amount extravagant enough to buy several major car companies. Regardless, he’s no longer under California’s tax jurisdiction. A few years back, he made the move to Texas.
California’s leaders, including Governor Gavin Newsom, generally oppose the tax initiative. However, Congressman Ro Khanna has voiced his support for a modest wealth tax, arguing that it could help address glaring inequalities and grant better access to health care.
Of course, Khanna faces challenges dealing with the wealthy elite, and there’s some risk there. Meanwhile, San Jose Mayor Matt Mahan tweeted his opposition, expressing that a wealth tax could harm California’s economic innovation. He pointed out the danger of standing alone in taxing billionaires’ net worth, stating that it could risk the very sectors sustaining economic growth.
I’m not a billionaire myself, so I find the notion of fleeing to evade taxes perplexing. It seems counterintuitive to leave a beloved home just to dodge taxes that don’t alter one’s living conditions—more like cutting off one’s nose to spite the face, as Mahan puts it.
Yet, the potential exodus of billionaires doesn’t necessarily spell doom for Silicon Valley, traditionally the hub for tech innovation. The Bay Area still offers an unmatched ecosystem for budding entrepreneurs and companies. While some tech folks have headed to Miami, they’ve claimed it would become the next Silicon Valley, but that hasn’t quite happened yet.
