Palmer Luckey’s Stance on California’s Proposed Billionaire Wealth Tax
Palmer Luckey, the California billionaire known for founding the virtual reality company Oculus VR, has been in the spotlight again as California debates a controversial billionaire wealth tax. Luckey first made headlines when he sold Oculus VR to Facebook for $2 billion in 2014 at the age of 21. Today, his current venture, Anduril Industries, a defense technology firm based in Costa Mesa, California, is valued at an impressive $61 billion, far surpassing his earlier success.
Despite his clear opposition to the proposed wealth tax, Luckey has firmly stated that he has no intention of leaving California over it. During an invite-only press conference, he emphasized his commitment to the state, saying, “I think California is something special. I want to fight for California.” This is notable considering the tax measure, which targets the net worth of the state’s richest residents, has sparked significant debate among high-net-worth individuals in the state.
Concerns About the Tax and Its Impact
Luckey expressed concerns about the tax’s potential consequences, including companies relocating out of California and influential billionaires leaving the state. “It’s causing a lot of people to run who I don’t want to be running. It’s going to cause companies that I work with to leave the state, which is a problem for me,” he said. However, he also acknowledged pressure from other wealthy individuals urging him to leave in solidarity. “This has been a point of friction between me and some of my other billionaire friends,” he shared, adding that he empathizes with their position but remains hopeful that the situation can improve.
Rather than objecting to the principle of taxation itself, Luckey’s main objection lies with the tax being sponsored by a specific union, a unit of the United Healthcare Workers, which he claims intends to use the proceeds primarily for their own purposes. The measure’s sponsors, however, outline that the funds would support “health care, education, and food assistance” programs across California, specifically naming Medi-Cal, the state’s health coverage program for low-income residents (source).
Complexities of Taxing Illiquid and Voting-Control Assets
One of the most contentious aspects of the proposed tax is how it would assess the value of assets, particularly unrealized and illiquid assets. The tax would apply not only to assets sold but also to those held, even if they cannot easily be converted to cash. Penalties for underpayment could be as high as 40%, which Luckey likened to “a seizure of future wealth.”
Moreover, the tax proposal attempts to levy taxes based on voting control, not just ownership percentage. According to the Tax Foundation, this means founders with super-voting shares—shares that carry more votes per share than regular stock—could be taxed on a larger stake than they actually own. For example, a founder with 40% voting rights but only 10% ownership could owe taxes based on the 40% voting share, a situation that could create substantial financial strain if the founder does not have liquid assets to cover the tax bill (source).
Luckey explained his own scenario with Anduril, where he has diluted his ownership by raising capital and distributing equity to employees but retained voting control to maintain company direction. “My employees have more equity in Anduril than me,” he said, “but what I have done is I’ve preserved the voting rights so that as those employees sell their shares, the voting control doesn’t go to other people outside the company.”
He further clarified that if he were to leave the United States, he would lose these voting rights, a condition aligned with Anduril’s status as a U.S. defense contractor heavily reliant on national security considerations.
Potential Financial Impact and Legal Challenges
Estimating the financial impact, Luckey believes he could owe approximately 5% of Anduril’s $61 billion valuation, roughly $3 billion, in taxes under the proposed measure. For context, Larry Page, co-founder of Google and a tech billionaire who has left California, still holds 27% voting control of Alphabet, Google’s parent company, which has a market value near $4 trillion (source).
Despite the steep potential tax burden, Luckey remains committed to staying in California and opposing the measure. He voiced hopes for legal challenges that would prevent what he sees as “post facto seizure” of wealth and the unprecedented taxation of voting interests rather than ownership. “That is not a tax on ownership. It is a tax on control,” he remarked.
Luckey’s stance reflects the broader tensions in California’s approach to wealth taxation, balancing the desire for increased public funding against concerns of economic disruption and fairness, especially for founders and entrepreneurs with complex equity structures.
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