November 20, 2020
Image: Jp Valery/NeONBRAND
Hello! This week: Keith Rabois might be part of a broader trend of tax flight, and everyone filed an S-1. Want Index in your inbox each week? Subscribe here.
Keith Rabois is having a big month. Not only does he have seven portfolio companies going public, he's also moving! Earlier this week, he announced that he's leaving the Bay Area and setting up shop in Miami, instead.
Rabois isn't the only person to move because of taxes. Palantir co-founder Joe Lonsdale said he's moving 8VC to Austin because of California's high taxes. "I could either put that money toward things that are fixing the world or give it to the California state government," he told CNBC.
And it's not just about income tax. Vieje Piauwasdy is director of equity advisory at Secfi, which helps startup employees understand and manage their equity, and he told me that he's increasingly coming across people leaving California to save on their equity taxes.
Tax gains often outweigh any salary adjustments that employers might make, Piauwasdy said. In fact, sometimes those lower salaries are instantly made up for by lower income taxes.
USPS data shows that thousands of people are leaving San Francisco, with Florida a top destination. Eventually, this could have significant repercussions: What does a state do if many of its high-earners are no longer around to fill up its tax base? We might not find out this year, or next, but California might want to start thinking about it.
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