The proposed California "entrepreneur's tax" is not a one-time levy on billionaires. It's viewed as the first step toward an annual tax on paper wealth, with thresholds planned to drop to $25M. This would impact founders with illiquid equity post-Series B, forcing a mass exodus before an IPO.

A provision in the proposed California wealth tax calculates an individual's net worth not by the market value of their shares, but by multiplying their voting power by the company's total market cap. This disproportionately affects founders with super-voting stock, like those of Google.

The idea that a billionaire can "spend" their net worth is flawed. Their wealth is primarily in company stock; liquidating it would crash the price and signal a lack of confidence. This misunderstanding of wealth versus income fuels unrealistic proposals for solving global problems.

California is on the verge of a massive tax revenue surge from upcoming IPOs of companies like SpaceX and OpenAI. However, a proposed wealth tax on illiquid assets is causing tech leaders to relocate, potentially costing the state the very economic boom it needs to balance its budget.

Billionaire wealth is largely illiquid and tied to asset values. A large-scale wealth tax would force mass sales, crashing the market value of those assets. The money is only 'there' on paper until you try to actually collect it, at which point its value collapses.

A California ballot proposition for an asset tax includes a provision that calculates value based on the greater of economic interest or *voting interest*. This is a punitive strike against tech founders with super-voting stock, as their tax bill would be a multiple of their actual wealth, potentially forcing bankruptcy.

The proposed wealth tax applies to illiquid assets. A founder of a highly-valued private AI startup could be deemed a 'billionaire' and face a massive tax bill on paper wealth, even if their company never exits or ultimately sells for a much lower price, creating a huge financial risk.

Instead of taxing unrealized gains, which forces asset sales and creates economic distortions, a more sensible approach is to tax the cash that wealthy individuals borrow against their assets. This targets actual liquidity and avoids punishing the long-term investment that builds the economy.

Mark Cuban highlights a fatal flaw in wealth taxes aimed at startup founders: they are "cash poor, stock rich." Their billions are on paper, tied to their company's valuation. A wealth tax would force them to liquidate stock or take on impossible loans, crippling high-growth companies before they mature.