Taxation vs relaxation: Harris, Trump, and big tech

Kamala Harris has made her career in California, where most of the US tech industry is based. Elon Musk and other members of the “PayPal mafia” support Trump, but Silicon Valley’s silent majority is now sending their wealth to the Democrats. Why?

With Donald Trump, you sort of know what to expect. Pushed by conservative ideologues, he supports lighter regulation and lower taxes. He hates antitrust and loves crypto – in the hopes of getting more votes in November.

Harris, though, is a harder nut to crack. If, as expected, she is soon officially nominated by the Democratic party to be its presidential candidate, most will, of course, remember that she grew up and rose up the career ladder in California – essentially a state where US tech was born.

That alone might seem enough for tech people to support Kamala – but it’s not because that’s not the way American politics works. Show me your cards, and we’ll show you the money, most industries intending to support one candidate or another usually say.

So far, Harris has not indicated in any way that she would not continue Joe Biden’s tough antitrust enforcement or that she would drop the idea of raising taxes on the ultra-wealthy.

Surely, the Silicon Valley crowd, especially the richest billionaires, would like to see less governmental oversight – called hostility by their sneaky lobbyists. Waving their wallets might result in some useful compromises if Harris does indeed win the presidential election.

Then again, Kamala, who was literally born in San Francisco, is already popular enough among more regular American folk. And if hundreds of thousands chip in, wealthy donors aren’t even needed.

On Sunday, the Harris campaign said it has raised $200 million and signed up 170,000 new volunteers in the week since she became the Democratic Party’s de facto presidential candidate. Quite obviously, Kamala has leverage.

Still, there’s a large gulf in how each candidate would handle major tech policy issues such as artificial intelligence (AI), antitrust, taxation, or cryptocurrency regulation if elected US president.

PayPal mafia at work

Just a few weeks ago, the tech leaders around Trump were glowing. The polls signaled a convincing victory for their candidate in November, and Democratic voters were massively demoralized – most of them despise Trump, but quite a few were not feeling it for Joe Biden, either.

For the Republicans, it seemed like the long march back to the White House would go on uninterrupted, and none was happier than Elon Musk, the richest individual on Earth who used to vote Democrat but now enthusiastically supports Trump and his vice presidential running mate, JD Vance.

Musk, the owner of Tesla, X, and SpaceX, isn’t the only tech mogul on Trump’s side, of course. Support for the Republicans has actually been surging in Silicon Valley, once seen as a bastion of liberal ideology.

Investors Peter Thiel, Marc Andreessen, Ben Horowitz, Sequoia partner Doug Leone, and many others have very vocally endorsed Trump in recent months. These are mostly members of the “PayPal mafia.”

The Biden administration has indeed been quite strict in its regulatory approach, and that has inevitably angered an industry used to getting what it wants at any cost. To the tech visionaries, almost any kind of regulation allegedly hurts innovation and the economy in general.

Support for Trump has been especially high in the large and growing cryptocurrency industry. Trump sees that and is now courting the sector, giving a keynote speech at the Bitcoin 2024 conference. Harris was also invited, but she turned down the opportunity.

Trump also promises sweeping rollbacks of AI regulation, and it looks like Biden’s executive order on AI would be up for cancelation.

Quite obviously, Trump’s business background makes him generally more sympathetic to the business community, and he would be unlikely to appoint strong enforcers, for example, to the Federal Trade Commission, where Linda Khan has been leading quite a few big cases for now.

Besides, Trump has already indicated he would extend his 2018 tax cuts when they expire in 2025 and cut income and corporate taxes even further – this is what the venture capitalist class wants, of course.

The dudes of Silicon Valley, according to The Washington Post, even orchestrated Vance’s rise in the ranks of the Republican Party in the hopes that if elected, he would eagerly defend the interests of allegedly ultra-innovative tech start-ups and attack government scrutiny.

IT'S JD VANCE

WE HAVE A FORMER TECH VC IN THE WHITE HOUSE

GREATEST COUNTRY ON EARTH BABY

🇺🇸🇺🇸🇺🇸 pic.twitter.com/yg86IT1vlr

undefined delian (@zebulgar) July 15, 2024

“WE HAVE A FORMER TECH VC IN THE WHITE HOUSE GREATEST COUNTRY ON EARTH BABY,” Delian Asparouhov, a partner at Thiel’s Founder’s Fund, posted on X after Trump disclosed the name of his running mate.

Musk unshackled

Musk is a special case, though. Not only is he rich but he also owns X, formerly known as Twitter, which is an influential social media platform in American politics.

The billionaire claims to have voted for Democrats for years but has endorsed Trump this time around. Why? Well, out in the open, Musk claims to share antipathy toward the so-called woke culture revolving around raising awareness of issues such as racism, inequality, and other forms of discrimination.

In reality, though, Musk was probably angered when the Biden administration began praising various US car manufacturers for electrifying the industry – but did not mention Tesla. Musk then posted on Twitter: “Biden is a damp [sock emoji] puppet in human form.”

The Wall Street Journal even reported recently that Musk was donating or planning to donate $45 million a month to a new pro-Trump super political action committee. Musk soon denied the report but did admit he created the super PAC, called America PAC.

Still, he owns X and seems to enjoy the power and the ability to troll, mock, and actually censor his – and Trump’s – political opponents.

For instance, Musk shared a deepfake video spoofing Harris on X and calling her a “deep state puppet,” even though the post violated the platform’s own policies against synthetic and manipulated media. The billionaire laughed off criticism.

And yes, AI voice-cloning might sow chaos in the election. But Musk is working all around – the Democrats claim X improperly prevented users from following an official presidential campaign account for Harris last week.

Users were briefly blocked from following the “KamalaHQ” account: they received the “Limit reached” error message.

Dear @elonmusk @X what does this mean, I haven’t tried to follow anyone lately pic.twitter.com/86gFVUwxN5

undefined Brian Lynch (@BrianLynch) July 22, 2024

The suspension of a “White Dudes for Harris” account after a lucrative online fundraiser attended by Jeff Bridges, Pete Buttigieg, and other celebrities and political figures only added to questions about whether X can still be considered a politically neutral digital town square.

The silent majority speaks up

However, Kamala’s opponents' increasing hysteria is actually good news for her. It looks like the silent majority of Silicon Valley is waking up.

For months, the more traditional tech leaders kept their mouths shut. But after Biden stumbled hard during the debate, they locked their wallets and demanded change. Now, with Harris taking on Trump, the energy has come back.

“The shift toward Harris in Silicon Valley is very real. Seeing more momentum in this direction each day from founders, VCs, and more. Growing view that Trump was chaotic and unpredictable, and Harris can be a more stable, pro-tech, pro-business President,” Aaron Levie, the co-founder and CEO of the enterprise cloud company Box, said on X this week.

The shift toward Harris in silicon valley is very real. Seeing more momentum in this direction each day from founders, vcs, and more. Growing view that Trump was chaotic and unpredictable, and Harris can be a more stable, pro tech, pro business President.

undefined Aaron Levie 🇺🇸 (@levie) July 31, 2024

Undoubtedly, the investors see dramatic changes at the polls – Harris seems bound to do much better than Biden would have, and if she picks, say, Josh Shapiro, the governor of Pennsylvania, as her running mate, she will probably win both the important swing state and the whole election.

In fact, more than 100 Silicon Valley investors pledged to support Harris this week and formed a group called “VCsForKamala.” The group includes Reid Hoffman, the founder of LinkedIn, investor Vinod Khosla, who co-founded Sun Microsystems, Mark Cuban, angel investor Ron Conway, billionaire Chris Sacca, and others.

“We are pro-business, pro-American dream, pro-entrepreneurship and pro-technological progress,” the group said in a statement posted to its website, VCsForKamala.org. “We also believe in democracy as the backbone of our nation.”

The website asks people to sign a pledge to support Ms. Harris and another to donate to her campaign. The money, though, is already flowing in – Andrew Byrnes, a longtime campaign bundler for Harris, recently said he has fielded twice as much money for Harris in a week than what he had raised for Biden in over a year.

The divide is pretty familiar: those who support Trump do so to protect their money, and those who support Kamala also care about social issues such as abortion, women's rights, or the environment.

Some Democratic operatives were concerned Biden wasn’t doing enough to woo the techies. Kamala’s team looks much more active – Harris, who is from the San Francisco Bay Area, is planning a fund-raising trip there in August.

The divide is pretty familiar: those who support Trump do so to protect their money, and those who support Kamala also care about social issues such as abortion, women's rights, or the environment.

They still care about money, of course, but they view Harris more like Barack Obama, who was friendly to the tech world. And the liberals are now emboldened enough to spat publicly with the industry right-wingers.

When Musk taunted Khosla online the other day and encouraged him to support Trump, the Democratic donor responded: “Hard for me to support someone with no values who lies, cheats, rapes, demeans women, hates immigrants like me.”

“He may cut my taxes or reduce some regulation, but that is no reason to accept depravity in his personal values,” Khosla added.

New generation of voters

That mental compromise many tech leaders have to make might be crucial, indeed. At times, Harris has been merciless to big tech – for instance, she went after Facebook as a senator during the Cambridge Analytica privacy scandal.

But even if there are no signs now that Harris would change Biden’s tech agenda much, there’s still time to essentially infiltrate her campaign and try to shape Kamala's position on tech and innovation.

Finally, one has to be blind to not see that the country is changing – and fast. 20.2 million baby boomers have died in the US since the 2016 election. At the same time, since 2016, 41 million people of the Gen Z generation have risen to the age of voting.

In other words, older, more conservative people are dying off, and younger, more progressive Americans are coming up.

If we need a killer number, here it is: eight million people came into the game since the 2022 midterm elections, and when polled, 63% of them said they were hard Democrats.

In swing states, even 30,000-40,000 votes matter, as Trump’s wins in Michigan, Wisconsin, and Pennsylvania in 2016 have demonstrated. Tech leaders should buckle up and adapt – the last few weeks have shown they’re doing just that.

Khosla might have spoken for many more classical techies when he said on X that he wanted “growth-oriented economic policy and little to moderate regulation depending on the domain” and to focus on economic mobility as a policy goal. Crucially, a candidate should also prioritize equity in society and care for the bottom 25%.