Mark Cuban said startup founders would leave under a proposed wealth tax. The founders themselves are split.
California will vote on its statewide "billionaire tax" in November. In an X response to Rep. Ro Khanna, Cuban said the tax would adversely affect founders, who may be billionaires in stock but lack the cash to pay it. "If this passes, only idiot startup founders stay," he wrote.
In an email to Business Insider, Cuban clarified that "not every founder will face the tax." There are "a lot of incentives to go elsewhere," he wrote.
"Cali isn't the only place with a nice climate," Cuban wrote.
Business Insider put Cuban's theory to the test. We asked three startup founders: If the tax passed, would you leave? The results were mixed.
Jesse Tinsley said the billionaires will flee California if it passes.
Tinsley founded Mainstreet.com, a holding company that houses Employer.com, Bench, and others. He wrote to Business Insider that he'd personally leave the state if the tax passed.
"It's not just me," Tinsley wrote. "It's every CEO or founder over a billion dollars in net worth minus a handful."
Tinsley said that billionaires don't want to speak out publicly because they don't want "the public backlash." He also cited the Laffer curve, the economic theory that tax revenue will revert to zero as the tax rate increases past a maximized point.
Take a smarter break in your day – and see how far you get.
Where would he go? Tinsley said he'd head to Florida. "If I was moving there permanently, I would get a home in Miami/Palm Beach area," he wrote.
The state — and Miami specifically — has grown increasingly popular with a class of tech leaders.
Others were less committal but expressed frustration. Jaspar Carmichael-Jack said that he'd "seriously consider leaving California in the medium term" if the tax passed.
Carmichael-Jack cofounded Artisan, the AI startup behind those viral "Stop Hiring Humans" billboards. He grew up in the United Kingdom, but moved to San Francisco to build his company.
"It's a direct hit to illiquid founders building companies, and it makes it harder to justify staying when other states are actively competing for startups," Carmichael-Jack wrote.
Source: Read the original article on www.businessinsider.com
