The billionaire tax proposal that's driving Silicon Valley to support Trump

The Biden administration's proposed Billionaires Minimum Income Tax has sparked significant backlash from Silicon Valley, particularly among venture capitalists like Marc Andreessen and Ben Horowitz, who argue it could harm the startup ecosystem. They express concerns that the tax, which aims to tax unrealized capital gains for individuals with over $100 million in assets, would create financial burdens for startup founders who may not have liquid assets to cover tax liabilities. Critics of the proposal highlight that it is unlikely to pass in Congress and may face constitutional challenges, especially following a recent Supreme Court ruling suggesting that a realization requirement is necessary for capital gains taxes. The proposal seeks to address issues with the current capital gains tax system, which allows wealthy individuals to defer taxes on unrealized gains indefinitely, creating inequities and potentially stifling economic growth. Alternatives to the proposed tax include closing loopholes like the "angel of death" loophole, which allows heirs to avoid capital gains taxes on inherited assets. While the Biden plan may not materialize, there are other potential reforms that could effectively tax the ultra-wealthy without the same level of resistance, such as taxing loans used by billionaires to generate tax-free income. Overall, the debate reflects broader tensions between tax policy and innovation in the tech sector.