President Donald Trump’s artificial intelligence and cryptocurrency czar, David Sachs, on Wednesday criticized California’s proposed wealth tax on billionaires as a “terrible direction” for the United States.
“This is not a tax. This is an asset seizure,” the venture capitalist told CNBC’s “Squawk Box” from the World Economic Forum in Davos, Switzerland.
“There’s never been anything like this in American history,” he added.
The Billionaire Tax Act, currently collecting signatures to be added to the November ballot in California, proposes a one-time 5% tax on the total assets of residents with a net worth of $1 billion or more. This tax applies to California residents as of January 1, 2026.
“This is not a one-off, this is a first,” Sachs insisted.
“And even if they get away with it, there will be a second time, a third time. And this will be the beginning of something new and different in this country, and that is asset seizure,” he said.
Sachs, who moved to Texas after living in California for 30 years, believes the bill has a “good chance” of passing and could set a precedent for similar bills in other states.
He criticized Gov. Gavin Newsom for being slow to oppose the bill, arguing that it would cause $1 trillion in net assets to leave the state and leave a “giant hole” in tax collection.
Despite taxes, CEOs NvidiaJensen Huang of OpenAI and Sam Altman of OpenAI have indicated they plan to remain in the state. airbnb CEO Brian Chesky also told CNBC this month that he plans to remain in California.
But Sachs said California’s small businesses are more flexible and choosing to exit.
“The network effects in California are strong because we have large companies in the state,” he said of large companies like Nvidia. “That’s why progressives think they can get away with this problem.”
