Elon Musk’s lawyer Alex Spiro is the most recent billionaire rep to blast a proposed California wealth tax that has a number of the state’s wealthiest residents heading for the exits — with the facility lawyer urging Gov. Gavin Newsom to scrap the thought.
The billionaire tax “will set off an exodus of capital and innovation from California,” Spiro wrote in a Dec. 11 letter to Newsom, which was obtained by Enterprise Insider and confirmed by The Publish.
“Our shoppers have made clear they are going to completely relocate if subjected to this tax,” Spiro wrote on behalf of unnamed billionaire shoppers.
Spiro, Musk’s longtime lawyer who’s representing the X proprietor in an ongoing shareholder lawsuit, requested Newsom to assist kill the proposed 5% wealth tax on billionaires or face a painful authorized problem and embarrassing press protection.
“Our shoppers want to stay in California and proceed contributing to the state’s financial system and civic life. However they won’t stay if subjected to an unconstitutional confiscation of their wealth,” Spiro wrote.
“We hope this may be resolved by means of political channels reasonably than by means of years of contentious litigation,” Spiro continued.
Even Newsom is on report opposing the billionaire tax, a voter initiative sponsored by SEIU-United Healthcare Employees West union that wants about 870,000 signatures to qualify for the November 2026 poll.
The tax would acquire 5% of the whole wealth of roughly 200 billionaires and would apply to anybody value over $1 billion who resides in California as of 2026. Proceeds would replenish federal cuts to well being care and training, in accordance with proponents.
“We now have one person who represents one labor union within the state of California that has not collected one signature that’s contemplating placing on the poll after he collects signatures, a wealth tax that overwhelming majority of labor opposes and virtually all people I do know opposes,” Newsom mentioned on the New York Instances Dealbook summit on Dec. 3.
Though Newsom has no direct authority to cease the tax, Spiro advised he “discourage signature gathering, oppose qualification, and if mandatory, marketing campaign in opposition to passage” to stop an exodus of capital and wealth from California.
It’s not clear who Spiro is talking for within the letter, the superstar lawyer has repped rappers Jay-Z and Megan Thee Stallion and New England Patriots proprietor Robert Kraft, along with dealing with numerous issues for Musk.
Google co-founder Larry Web page, enterprise capitalist Peter Thiel and investor Chamath Palihapitiya are among the many California billionaires probably heading getting ready to flee California earlier than the tip of the yr.
Web page and Thiel may very well be on the hook for roughly $12 billion and $1.2 billion, respectively, below the proposed billionaire tax.
Musk, who based a number of corporations in California earlier than shifting to Texas in 2020, has had a tumultuous relationship with the Golden State and its governor.
After rising Tesla and SpaceX in California, tensions arose when Musk defied the state’s strict Covid lockdowns. Newsom later mentioned he wasn’t “frightened” about Musk leaving the state.
“I’ve had a whole lot of conversations with him, and we’re dedicated to the success and the innovation and the low-carbon, inexperienced progress financial system that he’s been selling for many years and the state of California is accelerating in,” Newsom informed CNBC in Might 2020.
The 2 appeared collectively at an occasion celebrating a brand new Tesla AI and engineering website in 2023 however later sparred extra just lately as Musk grew more and more essential of California laws and liberal politics.
Musk and Newsom clashed this month after the governor’s press workplace posted, “We’re sorry your daughter hates you, Elon,” in response to Musk’s America PAC knocking Newom’s help for pro-trans payments in California.
“I assume you’re referring to my son, Xavier, who has a tragic psychological sickness brought on by the evil woke thoughts virus you push on susceptible kids,” Musk shot again on X.
Spiro argued in his letter to Newsom that the proposed billionaire tax is an unlawful confiscation of property and would pressure taxpayers to liquidate belongings en masse.
Furthermore, it might “alternate a one-time windfall for the everlasting lack of billions in annual revenue taxes, capital beneficial properties taxes, property taxes, and financial exercise” — echoing different critics who say the tax would backfire, killing the Golden Goose.
