Google founders eye California exit as state weighs one-time wealth tax

By Ryan Mac, Theodore Schleifer & Heather Knight

 

Larry Page and Sergey Brin, two Stanford University graduate students, created the search engine in 1998 and built the start-up out of a friend’s garage in Menlo Park, Calif. Over time, Google became a nearly $4 trillion juggernaut, helping to cement the Northern California region as the global epicenter of the internet industry.

 

Now,  Brin and  Page are cutting some ties with the state where they made their fortunes. In the 10 days before Christmas, an entity connected to  Brin, 52, terminated or moved 15 California limited liability companies that oversee some of his business interests and investments out of the state, according to documents seen by The New York Times. Seven of the companies — including those that appear to manage one of  Brin’s superyachts and his interest in a private air terminal at San Jose’s international airport — were converted into Nevada entities.

 

Brin is joining  Page, 52, in reducing his California presence. More than 45 California limited liability companies associated with  Page filed documents last month to either become inactive or move out of the state, according to state records. A trust with ties to  Page also purchased a $71.9 million mansion in Miami’s Coconut Grove neighborhood this week, according to a deed seen by The Times.

 

Another entity jointly managed by  Brin and  Page moved out of California and to Nevada on Christmas Eve, according to a filing seen by The Times.

 

The Google founders’ shrinking connections to California underscore the impact of a potential ballot measure that would affect the state’s wealthiest residents. Proposed by a health care union, the measure calls for Californians worth more than $1 billion to pay a one-time tax that would be equivalent of 5 percent of their assets. If the measure gains enough signatures to reach the state ballot in November and wins approval, it would retroactively apply to anyone who lived in the state as of Jan. 1 and they would have five years to pay it.

 

The potential wealth tax has already caused some California billionaires to establish more ties outside the state. Last month, the venture capitalist Peter Thiel announced that he opened an office for his family investment firm in Miami. David Sacks, the tech investor and White House adviser on artificial intelligence and cryptocurrency, unveiled a new office for his venture capital firm, Craft Ventures, in Austin, Texas.

 

But the actions of  Brin and  Page stand out because of their wealth — their combined net worths total more than $518 billion, as estimated by Forbes — and how closely identified they are with California. While both stepped down from day-to-day management of Google and its parent, Alphabet, in 2019, they remain on the board of the company and  Brin has recently become more active in Google’s A.I. efforts.

 

Brin and  Page still have connections to California, including homes across the state. It’s unclear how much time they will be spending in the state this year.

 

A representative for  Brin declined to comment. Google and representatives for  Page did not respond to requests for comment. The Wall Street Journal previously reported on  Page’s Miami home purchase and Business Insider reported on some details of the shifting of  Page and  Brin’s companies. The ballot initiative, which was proposed by the Service Employees International Union-United Healthcare Workers West to offset federal budget cuts that will affect California’s health care system, has elicited a broad spectrum of reactions.

 

Gov Gavin Newsom has called the measure bad policy, arguing that it will lead billionaires to simply move to tax-friendlier states. Representative Ro Khanna, a Democrat whose district includes part of Silicon Valley, has defended the initiative, drawing criticism from tech investors and entrepreneurs who are discussing funding a challenger to his seat.