AI czar David Sacks said California is taking a potentially “scary direction” if voters approve a wealth tax on billionaires.
“This is not a tax, this is an asset seizure,” Sacks told CNBC on the sidelines of the World Economic Forum in Davos.
Sacks, a longtime venture capitalist, is just one of the many voices in the tech industry who have denounced “The Billionaire Act.”
Craft Ventures, the firm Sacks cofounded with Bill Lee, previously announced that Sacks had relocated to the Austin area in December. According to Bloomberg, Sacks is a billionaire and thus could have been subject to the tax.
While the proposal is limited, Sacks said it would just be the beginning.
“It’s not a one-time. It’s a first time,” he said. “And if they get away with it, there’ll be a second time and a third time. And this will be the beginning of something very new and different in this country.”
If passed, California residents with a net worth of over $1.1 billion would face a one-time tax totalling 5% of their assets. (Residents with a net worth between $1 billion and $1.1 billion would pay a smaller tax.)
Google cofounders Larry Page and Sergey Brin moved entities tied to them out of California ahead of the deadline. Other billionaires, such as Nvidia CEO Jensen Huang, have said they won’t leave the state.
The tax has yet to be approved. Supporters are still gathering enough signatures to put the issue before California voters this November. If they meet that threshold, a majority of voters would then need to support it. It’s likely legal challenges would ensue as well.
Sacks said Gov. Gavin Newsom deserves blame for the current situation for not opposing the tax sooner.
Newsom and his office denounced the proposal for months, opposition that the potential 2028 presidential candidate has continued to step up.
“I’ll do what I have to do to protect the state,” Newsom told The New York Times in an interview earlier this month.
In a separate interview, Newsom said the news that billionaires like Brin and Page were leaving the state was exactly the response he had feared. California is home to more billionaires than any other state.
“This is my fear. It’s just what I warned against,” Newsom told Politico. “It’s happening.”
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