Because of asset seizures, I am starting my new company outside California
Today was a bad day. After meeting with my tax accountant, I am now cutting a very large check to the State of California, all of which resulted from Proposition 30 and the “retroactive tax” that was levied on my 2012 income.
This despite the fact that I already paid my 2012 taxes back in September.
While the law stipulates that I must surrender this money, I refuse to acknowledge this as a tax at all. This is not a tax. This is an asset seizure plain and simple. The term “retroactive tax” is a despicable euphemism. It is no different than when Hugo Chavez used the benign-sounding “nationalize” to describe his seizure of private property in Venezuela.
Now before I go any further, let me tell you what I am not.
I am not a Tea Party member. I am not even a Republican. Twice I have voted for Barack Obama, and I was supportive of his tax compromise earlier this year. I am not a person who opposes paying taxes, even higher ones. I am a very reasonable person who respects the great opportunity that America has given to me.
But there is a very clear and unambiguous line between taxes — regardless of how high they are — and asset seizures. The State of California has taken money from me. Money that I already earned and paid taxes on, and I will not tolerate this act of theft.
So what am I doing about it, other than speaking up?
Well, I am moving my new company — which is now closing a round of venture funding from world-class investors — to the East Coast. Because my last company created almost 200 jobs, most of which were in San Francisco, this is not good news for the State of California.
As I write this, I am hiring people on the East Coast who might otherwise have been hired in California. Some have already been hired. My California employees will be relocating to New York by early next year.
I will also be leaving California next year and de-establishing residency to be with my new company. No more 13.3 percent of my income for you, California. How does 0 percent sound? That sounds good to me.
Now, to be clear, my new company will be in the Media space, and there are plenty of business reasons why I am starting it outside of California. In my opinion, New York is a better place to start this company. But make no mistake: California’s seizure of my personal assets is a big reason why I am moving.
Similarly, the state’s constant battering of successful startups is another factor. Consider the outrageous retraction and “back-taxing” that took place recently with the Small Business Tax.
Some people will argue that voters supported this “retroactive tax." That means nothing. Absolutely nothing. This is exactly why the Founding Fathers of the United States completely opposed direct democracy. Because it often leads to mob rule. If "majority rule" were a fair reason to seize assets, then Zimbabwe’s farm seizure laws would be totally kosher. We called it “mob rule” when they did it, and this is absolutely no different.
So why am I speaking up? Why am I risking the ire of readers and potentially besmirching my reputation? Because somebody needs to stand up and demonstrate the real impact of this.
People whose assets have not been seized are laughing and pointing to studies that suggest entrepreneurs will not leave. Rather, they suggest, the best entrepreneurs will stay in California and continue to finance this racket of a state government.
That is not happening this time, and I encourage all entrepreneurs to stand up and let themselves be known. None of us are "obligated" to endure state asset seizures, and there is no shame in paying the lowest taxes possible.
Or — to quote one of America’s most revered judges and judicial scholars, Billings L. Hand: "Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes."
Despite the ridiculousness of this “retroactive tax,” and despite the fact that no American has a moral obligation to put up with said taxes, there will still be a litany of responses from Californians who mock me and act as though I have encroached upon reason.
I constantly hear people say things like “Good Riddance!” or “Enjoy the weather out East!” or other snarky comments of the like.
Let me be unambiguous in my feelings on the matter — I would far prefer bad weather to bad government.
And while I will not be enjoying any large sugar sodas in New York, I will enjoy living in a city that works... complete with low crime, outstanding transportation, and city employees who bravely gave their lives to protect their city.
California will always be a part of my life. And because the state has been good enough to create such an easily-gamed tax system, I will happily move back when I retire... bypassing their high income tax and enjoying their artificially-suppressed property tax.
I love the people of California. I love the spirit of California. I love the climate of California (both literally and figuratively). I am a Californian at heart. I was born here. I have spent most of my life here. But I will gladly play the expatriot card for a few years while I embrace my next entrepreneurial venture.
My next company should be in New York, and so should I.
Hopefully, this article — and the voices of any other people who join me in speaking up — will do some good for California. No child will change his mischievous ways without a little punishment. And this state government behaves like a reckless, pouting child.
We need to stop giving in.