Trump AI czar Sacks calls California wealth tax an asset seizure and 'scary direction' for U.S.

David Sacks, the artificial intelligence and cryptocurrency advisor to former President Donald Trump, has voiced strong opposition to California's proposed wealth tax aimed at billionaires. Speaking on CNBC's "Squawk Box" from the World Economic Forum in Davos, Switzerland, Sacks labeled the initiative a "scary direction" for the nation, emphasizing, "This is not a tax; this is an asset seizure." The Billionaire Tax Act, which is currently gathering signatures for inclusion on California's November ballot, proposes a one-time 5% tax on the total wealth of individuals whose net worth exceeds $1 billion. This tax would affect California residents starting January 1, 2026. Sacks warned, "It's not just a one-time thing; it's a first time. If this passes, it could lead to a cycle of further asset seizures in the future." Having moved to Texas after spending three decades in California, Sacks expressed concern that the legislation could pave the way for similar measures in other states. He criticized Governor Gavin Newsom for his slow response to the bill, arguing this has contributed to a significant exodus of wealth from California, resulting in a substantial shortfall in tax revenues. While some prominent CEOs, including Nvidia's Jensen Huang and OpenAI's Sam Altman, have affirmed their commitment to remaining in California, Sacks noted that smaller businesses are increasingly choosing to relocate. He acknowledged the strong network effect of large corporations, which could allow them to withstand the potential impacts of the tax. However, he cautioned that the situation remains dire for many smaller enterprises, which are more adaptable and willing to move out of state.