Ben Horowitz warns California's proposed tax on unrealized gains would dismantle Silicon Valley, citing Norway's wealth tax as a warning

This is what the Communists want at national scale.

@tbpn @bhorowitz I don't see why everyone is freaking out - won't the supreme court strike it down? It is pretty clear that a wealth tax is unconstitutional.

This is wrong. Norway doesn't have an 'unrealised capital gains tax'. It taxes wealth ~1% on the book value of net assets minus liabilities and a discount. So in practice, a startup founder wouldn't get taxed on the newly markedup value of the company, only on the assets. Which is way less.

@tbpn @bhorowitz Ironic considering how much of Silicon Valley supported Ro Khanna all-in because he was a "moderate Democrat".

@tbpn @bhorowitz Norway has oil.

@jaedme @tbpn @bhorowitz The Supreme Court will be fine with it. Srates can do anything they want if they don't violate the US constitution or federal law. And the original US income tax only targeted the top 3%, so there is legal precedent.

So, stupid but legal (which could be California's epitaph).

@tbpn @bhorowitz "Companies don't die from competition, they die from suicide." Seems like Califronia is going out the same way

@tbpn @bhorowitz I’m not a fan of this tax but I don’t understand why a state tax on wealth or unrealized gains would be unconstitutional. States, counties and municipalities already have property taxes which are wealth taxes. At the federal level, yes it’s most likely unconstitutional.

Is that right tho? The income tax was unconstitutional, so they had to pass a constitutional amendment that still doesn’t explicitly allow taxing wealth. With the Court we have now, they’d almost certainly strike it down. Yeah, maybe a liberal Court would invent some bullshit legal theory like they did with Roe, but I don’t think they would.

@tbpn @bhorowitz What baffles me is how so many Silicon Valley entrepreneurs have the "smarts" to establish amazing companies, but also the "stupids" to support leftist politicians whose policies ultimately lead to the destruction of those companies.

@tbpn @bhorowitz Norway has one of the most vibrant startup scenes in Europe. Lol

@idahocountrydoc @tbpn @bhorowitz well you cant violate constitutional rights at the state level either, so it would be banned in California as well.

@tbpn @bhorowitz Yes, please raise tax sky high so there won't be any business left in CA. America will win in the end.

@ben_burtenshaw @tbpn @bhorowitz I would assume equity is an asset.

@ben_burtenshaw @tbpn @bhorowitz The value of the company is an asset to the company owner.

@ben_burtenshaw @tbpn @bhorowitz You're one of the dumbest people in the world. How do you even dress yourself in the morning?

@Jkurt98 @jaedme @tbpn @bhorowitz I wish the Supreme Court considered taxation through your lens. Unfortunately they do not.

Legally, the services a state provides, including the laws that should protect citizens, are just compensation for taxation. That's why the Fifth Amendment does not prevent taxation.

@grok @ReeceHarding @ben_burtenshaw @tbpn @bhorowitz And is there evidence of an exodus in vc? What about pe?

The income tax wasn't unconstitutional because it violated individual rights; it was unconstitutional because article 1, section 9, clause 4 of the U.S. Constitution bars the FEDERAL government from imposing a direct tax except in proportion to the census, and SCOTUS had ruled that the income tax was a direct tax.

@tbpn @bhorowitz a16z might be right about dismantling sv, but norway's tax hasn't exactly crushed innovation either they just moved it to europe