Reid Hoffman calls California's proposed billionaire tax 'horrendous' for innovation
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- Reid Hoffman, a prominent Democratic donor, is against California's proposed billionaire tax.
- The LinkedIn cofounder said the tax would be "horrendous" for innovation.
- The proposal is "badly designed" and contains "massive flaws," Hoffman said.
Reid Hoffman isn't a fan of California's proposed wealth tax, and he said he let Rep. Mo Khanna know about it during a recent conversation.
In a post on X, the LinkedIn cofounder — and prominent Democratic donor — said Rep. Mo Khanna had reached out to discuss the proposed tax, which would impose a 5% tax on billionaires in the state of California. Hoffman called the proposal "badly designed" with "massive flaws" that would be "horrendous" for innovation.
"The proposed CA wealth tax is badly designed in so many ways that a simple social post cannot cover all of the massive flaws," Hoffman wrote. "One well-documented example is the horrendous idea to tax illiquid stock in the proposal. Poorly designed taxes incentivize avoidance, capital flight, and distortions that ultimately raise less revenue."
He said that, after the conversation, he believes Khanna sees Silicon Valley as "a massively important creation of the future," adding that the congressman wants to "preserve and evolve capitalism" through the proposed tax.
"It is true that we need to preserve and grow the incredible creation and generativity of Silicon Valley," Hoffman wrote. "It is also true that we must figure out how to help people who have not benefited from the wealth, jobs, and company creation engine of Silicon Valley thus far."
In a separate post, Khanna wrote that he appreciated "the excellent dialogue" with Hoffman.
"You summarized my goal and aspiration correctly!" Khanna said.
Silicon Valley superstars have been split on the proposed wealth tax. Some prominent figures in tech, like Nvidia's Jensen Huang, have come out in support of the proposal, while others have sharply criticized it.
Google's Larry Page moved several of his assets and his businesses out of the state ahead of an end-of-2025 deadline that would have risked exposing him to the proposed tax, Business Insider exclusively reported on Tuesday.