In a recent development in California’s ongoing debate over taxing the ultra-wealthy, prominent venture capitalist Peter Thiel has made a significant financial contribution aimed at defeating a proposed wealth tax initiative targeting billionaires within the state. According to financial disclosures reported at the end of December, Thiel donated $3 million to the California Business Roundtable, an organization opposing the ballot measure. This sizeable donation is seen as the beginning of what could be a broader effort by influential figures in Silicon Valley to contest the proposed legislation.
The initiative was introduced by a state healthcare union with the objective of addressing reductions in federal funding that have impacted California’s healthcare system. It proposes levying a 5% tax on the net assets of residents whose wealth exceeds the $1 billion threshold. The revenue generated from this tax would be used to counterbalance cuts at the federal level and bolster healthcare services within the state. However, for this measure to appear on the November ballot, advocates must secure nearly 900,000 valid signatures.
Governor Gavin Newsom has publicly opposed the proposed tax, cautioning that its implementation may result in the exodus of billionaires from California. In an interview, Newsom highlighted that even the introduction of the wealth tax initiative has had immediate consequences, including prompting some wealthy individuals to reconsider their residency in the state. Newsom emphasized a commitment to blocking the tax, underscoring concerns that it could negatively affect the state's economic vitality.
Reports indicate that several billionaires, including Thiel himself as well as Google co-founders Larry Page and Sergey Brin, are evaluating the possibility of diminishing their financial and residential associations with California. Bloomberg has documented that at least six billionaires have already relocated elsewhere in response to the proposed tax. Other notable investors such as venture capitalist Chamath Palihapitiya and hedge fund magnate Bill Ackman have publicly raised alarms about the measure, arguing that its implementation could discourage entrepreneurial risk-taking and stifle innovation within one of the nation’s leading economic hubs.
The $3 million donation from Thiel marks his most substantial publicly reported political contribution in several years. In recent election cycles, particularly in 2022, Thiel invested over $35 million backing candidates affiliated with the Make America Great Again movement. While the latest donation is not explicitly designated for defeating the wealth tax ballot initiative, it is aimed at supporting the lobbying activities of the California Business Roundtable, which opposes policies perceived as detrimental to business interests within the state.
As of now, Thiel has not provided a direct statement regarding his recent contribution or the wealth tax proposal. The conversation around this proposed tax continues to galvanize stakeholders across California’s economic and political landscapes, with significant debate anticipated as the signature-gathering process and legal considerations progress.
Palantir Technologies, where Thiel serves as chairman, recently traded at approximately $178.70 per share, reflecting a minor decrease of 0.40% at the time of reporting.