AI Startup Founder Plans ‘March for Billionaires’ Against California Wealth Tax

The controversy surrounding California’s proposed wealth tax has taken an unusual turn. A “March for Billionaires” is scheduled in San Francisco this Saturday, organized by Derik Kauffman, founder of AI startup RunRL. This event aims to protest the legislation known as the Billionaire Tax Act.

Understanding the Billionaire Tax Act

Introduced last year, the Billionaire Tax Act targets individuals with a net worth exceeding $1 billion. It proposes a one-time 5% tax on their total wealth. Supporters, including the Service Employees International Union (SEIU), argue that the tax could fund critical public services and help offset recent federal funding reductions.

Concerns Among Tech Founders

• Kauffman opposes the tax, believing it could harm the startup economy in Silicon Valley.
• He argues that the tax is “fatally flawed” as it would force startup founders to liquidate shares, potentially at unfavorable terms.
• Many tech leaders view the policy as a threat, with some threatening to relocate from California.

Kauffman emphasizes the unique challenges posed by taxing unrealized gains. He stated that valuing private companies can be difficult, leading to “disproportionate tax bills” for many founders. He also cited Sweden’s decision to eliminate a similar tax 20 years ago, which resulted in an increase in billionaires.

The March for Billionaires

Despite public skepticism about the march, Kauffman insists it is a serious event, not a satire. He clarified that he is organizing it independently, without any external funding or large backers. The event is expected to attract “a few dozen attendees,” although Kauffman noted that actual billionaire participation is uncertain.

Reactions and Future Implications

The public response has been mixed, with many expressing disbelief about billionaires marching for their interests. The ongoing debate about the wealth tax continues, especially considering California Governor Gavin Newsom’s announcement that he would veto the bill if it were to pass. This has led many to question the likelihood of the legislation being enacted.

As Kauffman and others prepare for the march, the discourse around California’s wealth tax remains heated, affecting not only tech elites but the state’s economy as a whole.