Billionaire Palmer Luckey says he won't leave California over wealth tax
Palmer Luckey, founder of defense tech company Anduril, said he is staying in California despite strongly opposing a proposed billionaire wealth tax. He fears it would effectively tax voting control of his company.
Palmer Luckey, billionaire founder of the defense technology company Anduril, said at a press conference on Monday that he does not plan to leave the U.S. state of California, even though he strongly opposes a ballot measure that would tax the net worth of the state's wealthiest residents. The proposal is headed to voters and could affect entrepreneurs based in the state.
Luckey became a billionaire at 21, when he sold virtual reality headset maker Oculus VR to Facebook for $2 billion in 2014. His current company, Anduril, is headquartered in Costa Mesa, near Long Beach, where he grew up. It was last valued at $61 billion.
Why he is staying
Luckey said the tax will cause many problems, push out people he doesn't want to see leave, and could lead companies he works with to relocate. Still, he stressed that for now he is staying and wants to fight for California. He revealed that other billionaires have pressed him to show solidarity by leaving, but he said he won't take part in that argument at present because he still believes things can be fixed.
In his words, the issue is not paying taxes as such, but that the measure is sponsored by a specific union, a unit of the United Healthcare Workers, which wants to use the money for its own purposes. The sponsors say the revenue would fund health care, education and food assistance, including Medi-Cal, the state's health coverage program for low-income residents.
How the tax would work
The tax would cover unrealized and illiquid assets, and penalties could reach 40%. According to the Tax Foundation, a tax policy think tank, someone with voting control would be treated as owning at least that share of a company, which would hit founders with super-voting shares. The drafters say this reading is mistaken.
Luckey estimates he could owe about 5% of Anduril's $61 billion value, roughly $3 billion, on that asset alone. He said he hopes the measure fails, and if it passes, that it is challenged in court.
