AI startup founder says he’s planning a ‘billionaires’ march’ to protest California’s wealth tax

The war over California’s proposed “billionaire tax” is getting weird. This week, amid the ongoing rancor from tech elites over the much-criticized bill, it became clear that someone was planning a so-called “Billionaires March” in San Francisco. A website advertised the event, offering little context other than a pithy slogan: “Denigration of billionaires is common. Losing them is expensive.”

The immediate reaction was skepticism, and most people assumed the site was some kind of bizarre hoax. “This is a joke/satire isn’t it?” one social media user wrote shortly after the news broke. But now, the apparent organizer behind the event has revealed that the walk will definitely take placeno A prank, which is scheduled to take place next Saturday.

The San Francisco Examiner first reported that the event’s organizer was revealed as Derik Kaufmann, founder of AI startup RunRL, which previously participated in Y Combinator’s accelerator program. Kaufman told the Examiner that the event was not funded or organized by any outside group, nor associations or corporations with deep pockets, but rather just him.

In a conversation with TechCrunch, Kaufman — who also told the Examiner that he is no longer involved with RunRL — confirmed that the driver behind the upcoming hike was California’s proposed wealth tax, which the tech founder said he believed would be “extremely damaging to the tech economy.”

The policy in question, the Billionaire Tax Act, was introduced last year, and requires Californians with wealth of more than $1 billion to pay a one-time 5% tax on their total wealth. The legislation, supported by the state health care union SEIU (Service Employees International Union), could pay for important public services and help the state offset recent cuts in federal funding, according to some experts. However, the policy has led to loud protests from some of the most prominent figures in the tech industry, who have either threatened to leave California or have already left. It also led to a seasonal wave of lobbying in the California legislature, trying to defeat the bill.

When asked why he opposed the legislation, Kaufman expressed concern about how the bill would impact Silicon Valley’s startup economy. “This tax in particular is fatally flawed,” he added. “It hits startup founders whose wealth is just paper. They will be forced to divest shares on potentially unfavorable terms, incur capital gains taxes and give up control. Not to mention, private companies are more difficult to value.”

“Many founders will be hit with vastly disproportionate tax bills,” Kaufman continued. “In addition, there is no precedent for this type of blanket wealth tax in the United States. Sweden eliminated its taxes twenty years ago to avoid capital flight and promote entrepreneurship, and now there are 50% more billionaires than there are in the United States.”

The online conversation about Kaufman’s planned event continued to alternate between skepticism and sarcasm. “I can’t imagine billionaires walking down the street,” one social media user said of the event.

Maybe this person is right.

Kaufman told TC that, so far, he is not aware of any actual billionaires planning to attend the rally organized in their honor. Kaufman said the event will likely include “a few dozen attendees,” though he stressed it’s not really clear how many people will attend.

The continued furor over the proposed tax is a bit funny, because it has been known for some time that the legislation has no chance of being enacted. This is because California Governor Gavin Newsom has already stated that if the bill passes one way or another, he will veto it.