The former president has attracted growing support from tech investors, who are seeking favorable tax policies and more deregulation that could widen inequality.
By Daria Solovieva, Capital & Main
This story is produced by the award-winning journalism nonprofit Capital & Main and co-published here with permission.
On the sprawling campuses of Silicon Valley, where innovation is currency and disruption is king, a surprising political shift is underway. While big tech has been historically liberal, there are a growing number of high-profile venture capital investors, serial entrepreneurs and analysts who feel increasingly comfortable publicly embracing Donald Trump. And though the replacement of Joe Biden with Kamala Harris at the top of the Democratic ticket has attracted more support from tech leaders, the fight is on for support in Silicon Valley.
The list of Trump supporters now includes activist hedge fund manager and investor Bill Ackman, cryptocurrency entrepreneurs and investors Tyler and Cameron Winklevoss, co-founder of PayPal and Palantir Technologies Peter Thiel as well as the co-founders of the influential venture capital firm Andreessen Horowitz, Marc Andreessen and Ben Horowitz. Venture capitalist Chamath Palihapitiya has shifted his allegiance from Democrats to Trump, while investor David Sacks, who previously said that Trump’s behavior around the Jan. 6, 2021, Capitol riots had disqualified him from holding future office, has now endorsed the former president.
Republican vice presidential candidate JD Vance has welcomed Silicon Valley’s support, even calling out Thiel, his political benefactor, by name and publicly asking for his backing in a Financial Times interview published on Aug. 29.
This patchwork of support isn’t necessarily born of shared values or a sudden appreciation for Trump’s brash style. Instead, it appears to be a calculated move aimed at securing a beneficial regulatory environment and decision-making process — one that could further concentrate wealth and power in the hands of tech’s elite.
Mark Cuban, the outspoken billionaire entrepreneur, captured the essence of this power play: “It’s not so much a support thing, it’s more like a takeover thing. [They’re] trying to put themselves in a position to have as much control as possible,” he told Jon Stewart on “The Daily Show” on Aug. 12. “They want Trump to be the CEO of America, and they want to be the board of directors that makes him listen to them.”
Support for Corporate and Personal Tax Cuts
At the forefront of these billionaires’ wishlist is the promise to make estate and wealth tax cuts permanent. Trump has pledged to extend the 2017 Tax Cuts and Jobs Act, which lowered the corporate tax rate from 35% to 21%.
According to Brookings Institution research, this could add $2 trillion to the U.S. deficit by 2028. Such policies also disproportionately benefit the wealthiest Americans, and studies have shown that corporate tax cuts and avoidance significantly worsen income inequality. A recent report from the Institute on Taxation and Economic Policy found that “nearly all the benefits of policies that provide corporate tax breaks and allow corporate tax avoidance go to white shareholders, foreign investors, and America’s economic elite, and almost none of these benefits go to America’s Black and Hispanic households.”
“These breaks fuel runaway corporate power and drive corporations to further prioritize shareholders’ interests over those of workers, consumers, and communities of color,” the authors of the report found.
In a separate study, the Center on Budget and Policy Priorities found that the 2017 Trump tax law, like the George W. Bush tax cuts before it, failed to trickle down to workers and instead provided windfall benefits to high-income households.
Their analysis suggests that extending these cuts would further benefit the wealthy at the expense of low- and moderate-income households.
“Extending the Trump tax cuts that expire at the end of 2025 — namely, the law’s individual income and estate tax provisions — would provide further windfall benefits to high-income households,” said the authors of the report.
“These cuts would come on top of the large benefits they would continue to receive from the 2017 tax law’s permanent provisions.”
Tech Opposition to Taxing Capital Gains
A growing number of tech investors are backing Trump due to concerns over tax policies proposed by Biden before he pulled out of the race, particularly a plan to tax unrealized capital gains. According to Axios, this was the “final straw” for Marc Andreessen.
“This is insane; they clearly want to pass the giant unrealized gains tax, and are on TV arguing for it,” Joe Lonsdale, co-founder of Palantir and one of the most prominent pro-Trump venture capitalists, said in an Aug. 28 post on X, formerly known as Twitter. “99% of those who build and invest understand how damaging this would be —it would decimate our innovation world.”
The Biden administration’s earlier proposal was limited in scope, promising to target individuals with over $100 million in wealth and primarily liquid assets. Since Harris rose to the top of the ticket there have been few details on her administration’s proposed tax policy. In her Democratic National Convention speech, Harris promised to offer tax breaks to the middle class.
“Instead of the Trump tax hike we will pass a middle-class tax cut that will benefit more than 100 million Americans,” she said. Those cuts would apparently come in the form of a revived and expanded child tax credit.
However, Harris has now proposed a less drastic increase in the top capital gains tax rate, with a 28% tax on long-term capital gains for those earning $1 million a year or more. The move would break with a plan outlined by Biden in his budget earlier this year.
Slashing regulations is another key draw for tech elites, as many in the industry hope for a more lenient approach to antitrust enforcement, potentially paving the way for unchecked corporate growth. This could further consolidate power in the hands of a few tech giants, potentially stifling competition and innovation in the long run.
“Trump is more of a CEO-like president. He doesn’t delegate as much, and he tends to make decisions more on his own experience, his own relations with people, as opposed to an interagency process with 19 meetings and four levels of memos, which is where a typical administration is,” said Robert Atkinson, president of Information Technology and Innovation Foundation. “So in that sense, they think, ‘Hey, if we can get some good meetings, and he likes CEOs, then maybe we can better advance our agenda that way,’ as opposed to a Harris administration.”
Trump’s crypto-friendly rhetoric has also energized some tech leaders. His promise to appoint an SEC chair who will “build the future, not block the future” suggests a potential loosening of regulations in the cryptocurrency sector. While this might benefit crypto investors and entrepreneurs, it could also expose average investors to greater risks in an already volatile market.
Washington, D.C.-based observers of multiple administrations like Atkinson point out that Biden’s lack of a chief technology officer and perceived slow rollout of broadband initiatives have sent negative signals to Silicon Valley, despite the administration’s $40 billion pledge for nationwide high-speed internet access. This perception of neglect has led some tech leaders to view Trump as a more tech-friendly alternative.
Despite Trump’s hardline immigration stance, some tech leaders believe they can leverage their support to influence policies crucial to their talent pipelines. However, immigration experts like Cecilia Esterline warn that Trump’s proposed policies could hurt the tech industry’s ability to attract global talent.
Trump’s recent proposal to appoint Elon Musk, who endorsed Trump in July, to head a government efficiency commission underscores the former president’s increasing ties with tech leaders.
Anti-Trump Venture Capitalists Speak Out
A number of anti-Trump venture capitalists have mobilized as well, even if their focus remains on the big economic picture. As Leslie Feinzaig, who launched the VCs for Kamala initiative, points out, “This election is about bigger things than the kind of cherry-picked, esoteric policies that don’t actually affect the majority of everyday people just trying to live their lives.”
Feinzaig feels that a small number of billionaires who are publicly outspoken are not reflective of the wider investor community.
“The story out in the world became that Silicon Valley and the tech industry were turning MAGA, not even just like right wing, but specifically kind of this branch of right wing that I don’t think is reflective of most people I talk to, and it’s not reflective of the founders,” she told Capital & Main. “That felt frustrating and felt like somebody needed to say something.”
Anti-Trump venture capitalists and other critics are concerned that short-term gains in tax cuts and deregulation could come at the cost of long-term economic health and societal stability. Michael Moritz, chairman of Sequoia Capital, warns that pro-Trump tech elites are making a dangerous gamble, potentially enabling an authoritarian leader in exchange for personal gain.
As Cuban observed, the tech elite have “gotten to the point now where they feel like they should control the world.”
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