Are billionaires really packing up and leaving the United States? Peter Thiel, tech billionaire and Palantir co-founder, recently moved his family to Javier Milei's libertarian Argentina. He enrolled his children in local schools and, according to the New York Times, joined a Buenos Aires chess club.
But Thiel and other billionaires who move to another country or another state are just doing what smart rich people have been doing forever: hedging their bets. They've even coined a term for it: "Sovereign Diversification." A growing number of ultra-high-net-worth tech figures are investing in "Golden Visa" or Citizenship-by-Investment (CBI) schemes.
Thiel cited the California wealth tax as one reason he's changing countries. Other billionaires like Amazon founder Jeff Bezos, Facebook founder Mark Zuckerberg, and Google co-founders Sergey Brin and Larry Page all packed up and left California for Miami. Larry Ellison, co-founder of Oracle, moved from California to Nashville and also has a home in Florida.
Are all these men (and hundreds of other Americans worth $100 million or more) who have left California and other high-tax blue states selfish misers who refuse to pay their "fair share" of taxes?
What's a "fair share"? Rep. Alexandria Ocasio-Cortez and Sen. Bernie Sanders have been filling venues across the country in the last year on their "Fighting Oligarchy" tour. Not surprisingly, they're both kind of fuzzy about that little detail. They both back "The Make Billionaires Pay Their Fair Share" Act, which calls for a 5% "wealth tax" on billionaires' net worth. But billionaires didn't get to be billionaires by being stupid. The American tax code is chock-full of exemptions, shelters, and rules that would allow any billionaire with a reasonably creative accounting firm to find ways to reduce their "net worth" on paper.
“All billionaires of the world who want to flee countries increasingly regulated, with higher taxes and governments that persecute their citizens, are welcome in the Argentine republic, the new land of freedom,” Manuel Adorni, Milei’s cabinet chief, said last month before the Argentine Congress, in answering a question about Thiel.
That's true, unless or until the Argentine military or the mob make the country decidedly "unfree" in a coup or the elevation of socialists to office again. But President Milei continues to win in the courts and in Congress, so perhaps the momentum of change is gaining steam.
This is not a question of reforming the tax code. Billionaires in the United States already pay a higher marginal tax rate on their income than people in Norway and almost as much as citizens of Denmark.
This is confiscation. It is penalizing successful people for being successful. And the politicians supporting California's "wealth tax" and the proposed federal law are riding a wave of class envy and fear of the economic impact of AI.
"The pitchforks [are] here, they're not just coming," Gov. Gavin Newsom said last week. Newsom opposes the wealth tax, alarmed at not only the exodus of billionaires but the prospect of losing business to Texas, Florida, and other Sunbelt states.
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The best way to head off the pitchfork mob is to find ways to share the enormous economic benefits promised by AI. It's the billionaires themselves who are out front, leading this effort.
Jeff Bezos, the world's fourth-richest man, said on CNBC last week that the bottom 50% of earners should pay zero federal income tax. "You could double the taxes I pay and it's not going to help that teacher in Queens," the Amazon founder argued.
Sam Altman, the CEO of OpenAI and a longtime proponent of universal basic income, now favors "universal basic compute" — giving people access to AI's productive power instead of a fixed cash payment. OpenAI went further in April with a New Deal-style social contract that proposed a public wealth fund, taxes on AI-driven returns and automated labor, and a four-day workweek.
Elon Musk, whose SpaceX IPO could help make him the world's first trillionaire, has called for "universal HIGH INCOME" checks from the federal government — arguing robots will drive so much growth that inflation won't follow.
Between the lines: The billionaires and AI leaders floating these ideas are keenly aware that the politics of extreme wealth could turn dangerous fast.
In a January essay, Anthropic CEO Dario Amodei made what he called "a pragmatic argument" for billionaires to support higher taxes on AI wealth. "If they don't support a good version," Amodei wrote, "they'll inevitably get a bad version designed by a mob."
Does anyone really believe that a "wealth tax" won't eventually be used to tax the upper middle class or even the middle class? Anyone who owns a home or even a new car should worry about that. Not right away, but five years from now?
The government's voracious appetite for more revenue will continue as the $39 trillion national debt climbs and interest on that debt soars to over $1 trillion. We are not going to tax our way out of this crisis, and Bernie Sanders and AOC know it.
In the meantime, they are likely to ride the wave of taxpayer anger at the fictitious "fair share" that billionaires aren't paying and fear of the potential disruptions of AI to power.
President AOC, anyone?
Editor's Note: The Democrat Party has never been less popular as voters reject its globalist agenda.
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