AI Founder’s Wild Gambit Against CA Wealth Tax

Hustler Words – A peculiar protest is brewing in the heart of San Francisco, spearheaded by an artificial intelligence entrepreneur, challenging California’s contentious proposed wealth tax. What initially struck many as an elaborate piece of satire has now been confirmed as a genuine demonstration: the "March for Billionaires." Its provocative tagline, "Vilifying billionaires is popular. Losing them is expensive," encapsulates the sentiment driving this unusual stand against state policy.

The online world reacted with a mix of disbelief and amusement when the event’s website first surfaced. Social media users questioned its authenticity, assuming it to be a prank. However, Derik Kaufmann, the founder of AI startup RunRL and an alumnus of the prestigious Y Combinator accelerator program, has stepped forward as the sole organizer. Kaufmann, who informed the San Francisco Examiner he is no longer affiliated with RunRL, confirmed that the march, slated for this coming Saturday, is very much real and entirely his initiative, without the backing of any large corporations or wealthy associations.

In a conversation with Hustler Words, Kaufmann articulated his primary motivation: California’s proposed "Billionaire Tax Act." He firmly believes this legislation would inflict "quite damaging" consequences upon the state’s vibrant tech economy. The bill, introduced last year, seeks to impose a one-time 5% tax on the total wealth of Californians exceeding $1 billion. Proponents, including the Service Employees International Union (SEIU), argue the tax could generate crucial funds for public services and help offset recent federal budget cuts. Yet, it has ignited fierce opposition within the tech industry, prompting threats of exodus and a flurry of lobbying efforts in Sacramento.

Kaufmann’s concerns extend to the very fabric of Silicon Valley’s startup ecosystem. "This tax in particular is fatally flawed," he asserted. He highlighted the predicament of startup founders whose wealth often exists predominantly "on paper." Such individuals, he argues, would be compelled to liquidate shares under potentially unfavorable conditions, incurring capital gains taxes and relinquishing control over their ventures. The inherent difficulty in accurately valuing private companies further complicates the matter, potentially leading to "wildly disproportionate tax bills." Drawing a historical parallel, Kaufmann noted that Sweden abolished its wealth tax two decades ago to curb capital flight and foster entrepreneurship, a move he claims has resulted in Sweden now boasting 50% more billionaires per capita than the U.S.

Despite Kaufmann’s earnest intentions, public discourse surrounding the "March for Billionaires" continues to oscillate between incredulity and outright ridicule. The notion of billionaires taking to the streets for a protest has struck many as inherently absurd. Indeed, Kaufmann himself conceded to Hustler Words that he is unaware of any actual billionaires planning to attend the event organized in their honor. He anticipates a modest turnout, estimating "a few dozen attendees," acknowledging the uncertainty of participation.

Adding a layer of irony to the entire saga, the intense debate over the proposed wealth tax may ultimately be moot. California Governor Gavin Newsom has previously indicated his intention to veto the bill should it somehow pass through the legislature. This political reality suggests that, despite the fervor of protests like Kaufmann’s, the "Billionaire Tax Act" faces an uphill battle with little chance of becoming law.