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This column noted the proposed California wealth tax that is driving billionaires out of state. But the tax is actually much worse than it appears, even for those who assume that the 5% rate will rise and that the tax will eventually be applied to nonbillionaires. One provision appears specifically designed to reduce Silicon Valley business creation by encouraging aspiring company builders to leave the Golden State. Under the proposal, publicly-traded assets are taxed based on their market value. But if assets are not
publicly-traded, different rules apply, and that’s where the most damage can occur. Mike Solana writes at Pirate Wires: Late last year, the architects of California’s “Billionaire Wealth Tax” ballot proposition quietly amended language in their proposal which, if successful, would permanently end the concept of founder-controlled startups in the state — a technology industry kill switch. … this isn’t just a tax. This isn’t even just a horrifying first-of-its kind asset seizure that, like income tax, will almost certainly come for all of us. This ballot proposition redefines net worth in such a way that founders are considered owners of anything they control, assessing a founder with 10x voting rights per share in his own company, for example, as being “worth” 10x the dollar value of his equity. Per the late November amendment:
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