A Proposed Billionaire Tax Exposes the Dual-Share Racket

An underappreciated aspect of the one-time 5% billionaire wealth tax likely to go before California voters in November is that for several of the state’s most prominent billionaires, the rate might be far higher than 5%. This is because the text of the proposed 2026 Billionaire Tax Act says that in calculating the tax, “the percentage of the business entity owned by the taxpayer shall be presumed to be not less than the taxpayer’s percentage of the overall voting or other direct control rights.”

For Google co-founder Sergey Brin, among the most outspoken opponents of the tax, this could mean his taxable wealth is not the $304 billion net worth that the Bloomberg Billionaires Index estimated when last I checked (minus the proposal’s $1 billion exemption) but almost $1.2 trillion. That’s what you get when you multiply Brin’s 25.3% voting control of Alphabet Inc., Google’s parent, with Alphabet’s market capitalization of nearly $4.7 trillion. Five percent of nearly $1.2 trillion is $59 billion, or 19.5% of Brin’s actual net worth. For Brin’s co-founder, Larry Page, the effective tax rate could be 19.6% of his $327 billion net worth, and for Meta Platforms Inc. founder and chief executive officer, Mark Zuckerberg, 21.7% of $215 billion. The most extreme case may be DoorDash Inc. co-founder and CEO Tony Xu, who by my calculations could owe 122% of his Forbes-estimated $1.6 billion net worth. Capital gains taxes from selling shares to pay the billionaire tax could drive overall tax liability much higher, Jared Walczak of the center-right Tax Foundation estimated in January.