Palmer Luckey Stays in California Despite Proposed Billionaire Wealth Tax
Palmer Luckey will stay in California and fight a proposed wealth tax he says could impose a roughly $3 billion bill tied to Anduril voting control rights.
Summary
Palmer Luckey said at an invite-only Monday press conference that he will remain in California and fight a proposed ballot measure taxing its richest residents’ net worth, despite billionaire friends pressing him to leave. Luckey became a California billionaire at 21 when Facebook bought Oculus VR for $2 billion in 2014. His defense technology company, Anduril, is headquartered in Costa Mesa near Long Beach, where he grew up, and was last valued at $61 billion.
Luckey warns the measure is pushing people and companies he works with to leave. A United Healthcare Workers unit sponsors it, with proceeds designated for health care, education and food assistance, including Medi-Cal. Luckey says his objection is not taxation itself but the union directing funds to its preferred uses. The proposal covers unrealized and illiquid assets and permits penalties up to 40%.
The Tax Foundation says founders with super-voting stock could be assessed on voting power rather than economic ownership, meaning 40% of votes and 10% ownership could be taxed as at least 40%, potentially exceeding proceeds from selling every share. Drafters dispute that interpretation, saying publicly traded super-voting shares are valued differently. Luckey says employees own more Anduril equity than he does after fundraising diluted him and he granted staff stock, but he retained control. Those rights require him to remain an American citizen living in America and running Anduril, primarily a U.S. military contractor. He estimates a charge equal to 5% of Anduril’s value, about $3 billion. Larry Page, who left California, retains 27% voting control of Alphabet, valued just under $4 trillion. Luckey hopes the measure fails or faces legal challenges over retroactive taxation and taxing control.
Positives
- Palmer Luckey says he will stay in California and fight the measure, rejecting pressure from billionaire friends to leave.
- Tax proceeds are designated for health care, education and food assistance, including California’s Medi-Cal coverage program.
- Employees own more Anduril equity than Luckey after he granted staff stock and diluted his stake through fundraising.
- The measure’s drafters dispute claims that super-voting founders would be taxed directly according to their voting control.
Risks & concerns
- Luckey estimates the measure could charge him 5% of Anduril’s $61 billion value, producing a bill of about $3 billion.
- Penalties under the proposal could reach 40%, while unrealized and illiquid assets would be included in taxable wealth.
- The Tax Foundation says founders could be taxed on voting control exceeding their economic ownership, potentially creating bills that share sales cannot cover.
- Luckey warns people and companies he works with are considering leaving California because of the proposed tax.
- Legal challenges could follow if the measure passes, particularly over retroactive taxation and the treatment of company control.