Silicon Valley founders are afraid of a tax on unrealized capital gains: Why they changed sides in Biden’s budget proposal and why they support Donald Trump
Is there a potential national disaster that keeps you awake at night? As the clock is close to midnight on saving the Earth, some think it might be the climate crisis. There are people who are concerned about the state of our democracy. Still other citizens are haunted by issues of crime, immigration, race relations, or income inequality.
But if you are billionaire venture capitalists Marc Andreessen and Ben Horowitz, apocalypse looms in another form: a proposed tax on unrealized capital gains that affects households worth more than $100 million.
I will give an explanation as to why the cofounders of Silicon Valley’s most well-known VC firm are opposed to this idea and why they think their analysis of how it would destroy the country is alarmist. This part of Joe Biden’s budget proposal is what led to them supporting Donald Trump for president, according to the tone-deaf 90-minute podcasts they released this week. Far from a clinical analysis of the issues that separate the two leading candidates for America’s top job, their take on Biden’s policies actually provides a useful window to explain why certain wealthy Silicon Valley luminaries previously known as Democrats are suddenly leaning Trump. (That list also includes Chamath Palihapitiya, a 2020 Biden donor who recently cohosted a huge fundraiser for the former president.)
According to Andreessen and Horowitz, the point of their podcast is to explain why they changed sides, especially when they know it means alienating some friends, employees, and even Horowitz’s liberal mom. The long-time partners talked about their feelings for Biden. They seem totally unaware that they come off as a Gen-X version of the two soulless plutocrats in the movie Trading Places.
In their decision, the two said they were not looking closely at human rights, foreign policy, or other typical policy stuff. Since they are experts in startups—and that’s their business—they insist that the agenda of what’s called “little tech” will determine who they support. This term has become a sudden buzzword among the Trump-ites in the Valley. It refers to innovative startups hoping to become giant companies themselves but that might be thwarted by the powerful firms dominating the field, or even worse, by regulation. J.D. Vance, Trump’s VP pick and a former VC himself, has championed this cause. Andreessen and Horowitz think that the government itself is the biggest threat to little tech.
The problem is that no one has told the founders. Y Combinator has 500 slots to fill this year, and 50,000 companies applied for them. And while the collapse of Silicon Valley Bank made 2023 a down year for investment, VCs still managed to invest $170 billion in over 15,000 deals. The fund was raised in the month of April. Where is the crisis?
The Case against Donald Trump and His Running mate Judah Chess: The Case for the Future of the United States in the Light of Silicon Valley CEOs
Andreessen and Horowitz do enumerate several points of disagreement with Biden that affected their decision to go Trump. They are angry that the administration is policingcryptocurrencies and the ledger, an area where they have large investments. The regulation is lawless and dishonest, says Horowitz with typical hyperbole. The provisions in Biden’s order attempt to rein in the negative effects of artificial intelligence foundation models. They say that the final straw is the budget proposal to tax capital gains at 25 percent, which would affect only citizens worth over $100 million. Biden wants to prevent non-taxpayers from working it so their investments aren’t realized, which will allow them to make money by borrowing against them.
It is true in America as well as everywhere, but the real power is affecting the flow of resources. There is property. Money. There is information. If you command the levers of production—who gets what, when, and how—you dictate what the future holds, and who gets a say in it. You have the chance to decide the future of the United States. On the verge of another presidential election, no one knows that better than Silicon Valley CEOs and investors, some of whom publicly announced their support for Donald Trump and his running mate, Ohio senator J.D. Vance, this week.
Clemons identifies as socialist but “not in like a crazy, conspiratorial way,” he jokes. Republicans and Democrats are not going to give up their capitalist past in favor of a collective future where they let go of it. He wants people to understand that old ways of governance are not good for us. lemons unpacks complex issues like this in his series, #Poli-side-eye.
“I think the danger in looking backward and saying, ‘Oh, there’s this point in which we had this thing, but now we don’t have it,’ is that it makes you reactionary to me. It cuts off your imagination because you’re not thinking about what could be,” he says. Trying to get something back is what you’re focused on. You’re not going to get that back. Better futures could be possible, but they have to be willing to fail.
The man is Judah Chess. The best way to understand the economy is through production—what we are producing, what we are circulating, how is what we are producing getting to people. Essentially, what do we buy? If you analyse politics through that lens, it becomes a lot simpler to understand the incentives and motives of the wealthy.
Source: The Inevitability of Big Tech Backing Trump
What was Trump Really Doing When he Got elected? What Did He Do When He Got His Electorate and Why Did He Go Wall-to-Ball?
What’s one of the first things Trump did when he got elected in 2016? Really, the only big policy platform he had were sweeping tax cuts, which was a huge giveaway to corporations and very wealthy people, particularly people who had a lot of their wealth in the stock market. Part of the reason that you’re seeing a lot of support for him now is because those tax cuts are scheduled to expire in 2025.
