This as-told-to essay is based on a conversation with Scott Ellis, a 55-year-old millionaire who lives in Silicon Valley, about California’s proposed 5% billionaire wealth tax. Ellis is a member of Patriotic Millionaires, a collection of wealthy Americans who advocate for a fair tax system, a livable wage, and equal access to political power. The following has been edited for length and clarity.
I never thought I’d live in California. I grew up in Colorado, went to college in Boston, and lived in Texas. I came out here for business school because I wanted to be at Stanford, and because you could play golf during the winter.
Now I love it here. It has nothing to do with taxes; taxes have never been anywhere on our list of criteria for deciding where to live. I want to live where my family is and love the weather, the jobs, and the dynamism.
Taxes are the price that we pay to live in a civil society. We have to do this together. There are examples all around the world of the power of effective government, and just like anything else, government needs to be funded. We should make it effective and efficient.
I’m proud to pay the taxes I pay. I should pay taxes that are higher than other people because I have more wealth than other people — that makes sense.
My wife and I achieved financial success in our careers
A lot of our financial success has been due to my wife’s success, as well as mine at the beginning of our careers.
I went to Harvard undergrad, worked at McKinsey for three years, and then went to Stanford. I then worked at Hewlett-Packard for almost eight years.
In 2007, my wife was a VP at Yahoo and we had two small kids. I looked at my boss’s job, and at the CEO’s job, and decided I didn’t ever want those roles. I thought, “Uh-oh, I’m on this ladder, and it’s not really where I want to go.”
Ultimately, my wife and I decided that I would step back and be the stay-at-home parent. My wife continued her career, and she’s been very successful in consumer internet at Yahoo, Google, and Pinterest.
I developed an interest in social issues in college
I studied poverty, urban America, housing, transportation, and sociology in college, and started thinking more about questions like: What does fairness look like? What does justice look like? What would it look like to build a great society?
I got busy pursuing my career, meeting my wife, and raising our kids, but as time passed and we progressed in our careers, I got back into thinking about how we help others around us. I did a bunch of volunteer work in different contexts, eventually becoming the COO and then the CSO of a nonprofit called New Teacher Center, which does intensive mentoring programs for new teachers.
Since 2012, I’ve started and run several nonprofits in the education space, and advised almost 200 individuals and organizations on things like strategy, finance, operations, and culture.
I’m also really focused on addressing excessive wealth and its impact on society and thinking about a future vision for American democracy, which is how I came to Patriotic Millionaires, an organization of wealthy Americans who advocate for higher taxes on wealthy people like ourselves, a higher minimum wage, and a broader distribution of political power across our society.
I’ve been struck by the massive accumulation of wealth
In recent years, I’ve been struck by the massive accumulation of wealth enabled by the consumer internet space, globalization, and the structure of the finance industry. It’s different from what it used to be in the ’80s and ’90s; this is a whole new ballgame.
More recently, I’ve been looking around Silicon Valley at all these people who are so incredibly wealthy, talented, and successful, and realizing how few of them are thinking about choosing to build a better society together.
They’re excited about starting new companies and raising new funds, but these are all people who have more money than they could ever spend, and their next goal is to generate even more money, mainly for people who already have more money than they could ever spend.
Meanwhile, 10% of our society is in poverty. It really feels unfair and wrong, and we can do better.
People don’t need more than $30 million
The proposed billionaire wealth tax in California doesn’t impact me and my family directly. People may think, “You’re happy to raise taxes on other people.”
But we need to start with a different conversation, about how much wealth is enough, how much wealth is too much, and what is financial success?
I believe that if you have $30 million in wealth, congratulations, you won capitalism. If you do the analysis of reasonable investment returns and inflation, you can buy a really nice first house, a nice second house, your kids’ college is paid for, your end-of-life expenses are covered, and you have a very, very luxurious ongoing existence.
So much of success in life is luck. Yes, people absolutely get educated and work hard. But it’s been found that the wealthier people are, the more they tend to attribute their wealth to how good they are and how hard they worked.
I look at single moms working three jobs, working the night shift — a heck of a lot of people who have less than $190,000 [the median household wealth] in wealth are working very hard.
Once you get beyond $30 million — and almost no one ever gets there — you get to a point where your life is so good, you really can’t materially improve your life anymore. We should implement a very aggressive annual 50% tax on all household wealth over $30 million. Excessive wealth turns into excessive power through huge campaign donations, which threatens and undermines democracy and capitalism.
The wealth tax is a step in the right direction — but not enough
I’m absolutely delighted that we’re moving in this direction, but I believe changes to wealth taxes need to happen at the federal level.
When wealthy folks bring up moving out of California, it’s a distraction. All of a sudden, instead of us talking about the fact that millions of people are going to be either losing healthcare or paying much more for healthcare, we’re worried about the 200 really rich people who might move.
People move all the time. Companies move all the time for all kinds of reasons — it’s just part of business. These conversations happen all the time — like, “Oh my gosh, there won’t be any more companies in Silicon Valley.” Well, 20 years later, look around. There are still some companies here; it’s just fine.
It’s 65 degrees and sunny here. The CEO of Nvidia recently said they’ll be staying in California because that’s where the talent is. We’ve got the Golden Gate Bridge, Hollywood, Tahoe, the Redwoods, the beach, and great weather. I’m really not worried that people aren’t going to want to live in California.
I love it here. My wife and I are thinking about living in different cities for maybe a month at a time, but I have no plans to go anywhere else. Although I definitely love Colorado — I still have my Denver Broncos coasters and will be cheering for my Broncos — I’m from Silicon Valley now, and that’s where I’m going to stay.
