The California elite are reportedly setting up a nine-figure endowment fund to push back against the state’s political agenda, specifically the 5% wealth tax on billionaire’s that has already resulted in the ultra-rich fleeing Silicon Valley.
Maria Davidson, who is leading the effort, told Bloomberg the idea grew out of mutual concern among friends over the direction California is headed.
“We’re in early conversations with people who deeply care about the future of the state of California,” Davidson, the founder of construction startup Kojo, said.
Some of those people include Neil Mehta, the founder of Greenbacks Capital and Palantir Technologies Inc., co-founder Jon Lonsdale, who along with other high-profile entrepreneurs, are helping promote the project dubbed California Renewal, according to the outlet.
“A lot of people are supporting their effort from both political sides,” Lonsdale told Bloomberg. “We all want to see a more level political playing field, where common-sense, moderate policy can win, with a focus on making California more affordable and pro-growth.”
The idea behind the fund would be to counter what labor unions have at their disposal, in terms of money and a strong presence throughout the state.
California Renewal is being marketed to the state’s wealthiest residents as an endowment, according to the paper, with the goal of influencing public policy, the state’s elections, and providing financial contributions to political campaigns for an indefinite period of time.
The target goal for the fund is $100 million this year, the paper reported, with the ultimate goal of reaching up to $1 billion.
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While its unclear how much, if any money has been raised so far, the idea gained steam over a ballot measure proposal being pushed by one of the state’s most powerful health care union to impose a 5% wealth tax on California’s billionaires.
Garry Tan, chief executive officer of the startup accelerator Y Combinator, told the outlet that he is “definitely” donating to the cause — although, he didn’t say how much.
“I think it’s great,” Tan said. “We need to think about politics more like we think about investing.”
If the fund succeeds, it could be a game changer for the tech elite and California’s wealthiest residents, providing a vehicle to push back on unions and liberal state policies backed by a Democratic supermajority in the state legislature.
But, it won’t be easy — the move is already facing opposition.
Lorena Gonzalez, president of the California Labor Federation, told Bloomberg her support system of more than 2 million workers, could push for new taxes targeting endowments.
“You may be able to buy one election or one congressman or one governor even,” said Gonzalez. “You’re not going to buy California.”
A majority of California voters fear the billionaire tax will force businesses to flee the state — as the controversial proposal has only reached 25% of the signatures it needs to make the ballot.
In a poll this week, 64% of respondents were worried that the 5% wealth tax on billionaires will drive businesses out of the state.
FIfty-four percent were worried about them leaving, while 59% were concerned about the loss of future tax revenue as wealthy taxpayers flee.
Sixty-four percent were worried about future tax hikes on the middle class.
