Alphabet’s market value may have crossed $4 trillion, but Google’s co-founders appear to have taken a more personal measure of success: avoiding California’s proposed billionaire tax.
Larry Page and Sergey Brin have reportedly shifted entities tied to them out of California, while Page has also spent $173 million (€149 million) on two Miami estates.
The moves are widely assumed to be an effort to avoid a one-time 5 per cent wealth tax on residents worth more than $1 billion. The levy, if passed, would be retroactive and due in 2027.
It may not happen. Governor Gavin Newsom and other state politicians oppose the initiative, warning that billionaire flight could hollow out California’s talent base.
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High-profile hedge fund billionaire Bill Ackman argues the proposed tax addresses the wrong problem: modern billionaires can live lavishly without ever paying much income tax by borrowing against appreciated stock rather than selling it. In that sense, structural reform – closing what’s known as the “buy, borrow, die” tax loophole – might do more than a headline-grabbing one-off wealth levy.
Still, whatever the merits or demerits of wealth taxes, the Google founders’ flight is not a good look. It contrasts with another California billionaire, Nvidia’s Jensen Huang, who shrugged off the levy, saying he hadn’t “thought about it even once”.
Page (worth $287 billion) and Brin ($267 billion) are the world’s second- and third-richest people. Most wealthy people would agree that California is a pretty nice place to live. Leaving the so-called Golden State over a tax – even an ill-conceived one – hardly seems like a sacrifice worth making.
