Y Combinator CEO Garry Tan on why Google founders Larry Page and Sergey Brin ‘can’t stay in California’

Google co-founders Sergey Brin and Larry Page have officially shifted their base out of California, effectively beating the deadline for a proposed “wealth tax” aimed at the state's ultra-wealthy. While chief executives like Jensen Huang has said that he has ‘no problem’ with it, Garry Tan, CEO of startup accelerator Y Combinator, issued an explanation why both Google executives could not have stayed in California.In a string of posts on X, Tan said that they have been forced to flee California to avoid a tax bill that could “confiscate” half of their wealth. Tan argues that a specific provision regarding voting rights creates a “legal trap” that would artificially inflate the taxable value of tech founders' holdings by hundreds of billions of dollars.Larry and Sergey can’t stay in California since the wealth tax as written would confiscate 50% of their Alphabet shares. Each own ~3% of Alphabet's stock, worth about $120 billion each at today's ~$4 trillion market cap,” Tan said.“But because their shares have 10x voting power, the SEIU-UHW California billionaire tax would treat them as owning 30% of Alphabet (3% × 10 = 30%). That means each founder's taxable wealth would be $1.2 trillion.A 5% wealth tax on $1.2 trillion = $60 billion tax bill, each.That's 50% of their actual Alphabet holdings—wiped out by a "5%" tax.Under Section 50303(c)(3)(C) of the new Act, the tax valuation is not based on economic value alone, but on “voting or other direct control rights.” Since the founders hold Class B “supervoting” shares, this grant them 10x voting power, the law presumes their ownership stake is 30% for tax purposes, rather than 3%.Section 50303(c)(3)(C) of the 2026 Billionaire Tax Act states: "For any interests that confer voting or other direct control rights, the percentage of the business entity owned by the taxpayer shall be presumed to be not less than the taxpayer's percentage of the overall voting or other direct control rights."This means if a founder holds shares representing only 3% of economic interest but 30% of voting control (through Class B supervoting shares), the tax would presume their ownership stake is at least 30% for valuation purposes, not 3%.The wealth tax is poorly defined and designed to drive tech innovation out of California.The law is so poorly written. While the lawyers who drafted it claim it doesn’t apply to publicly traded shares, they designed a legal trap where Class B voting shares would count as private shares and therefore considered ownership.It’s so dishonest. Tan also pointed out another phrase, calling the tax act a means to extant as much tax as possible from California billionaires.The specific tell is this passage in the text: “provisions of this Part shall be liberally construed to effectuate its purposes”. In other words capture as much tax as possible.