Kevin Creaven came to Palo Alto last month with one ambitious goal: restrict sales of gasoline-fueled cars. Before long, he picked up another: tax the richest of the rich.
Creaven, who works as a chemical engineer for San Diego County, hopes local residents will help him achieve both in November when they go into the voting booth. He has just begun to collect signatures to place a wealth tax on the general election ballot, as well as for a separate measure that would ban sales of gasoline-fueled cars that cost more than $50,000.
Creaven, 29, makes no secret of why he chose Palo Alto as the place to launch the two efforts. It's a relatively small city, which means he would need to collect far fewer signatures than he would in San Diego. He had begun to pursue the efforts in San Diego when the coronavirus pandemic hit, making it infeasible for him to secure the funding he would've needed for the petition process, he said.
So he pivoted to Palo Alto, which famously has a concentration of well-known billionaires, a list that includes Facebook CEO Mark Zuckerberg, Google co-founder Larry Page and Laurene Powell Jobs, wife of late Apple CEO Steve Jobs and president of social investment firm Emerson Collective.
Creaven sees Palo Alto as a possible launchpad for a wealth tax, an idea that he hopes will start in the city and eventually expand to other parts of the country. Creaven, who supported U.S. Sen. Elizabeth Warren's bid to be the Democratic presidential nominee, borrows heavily from her wealth tax proposal, which called for a 2% tax on every dollar of net worth above $50 million and a 6% rate on every dollar of net worth above $1 billion.
Creaven's proposal, by contrast, would create a 2% wealth tax on net worth above $50 million and a 3% wealth tax on net worth above $1 billion. Palo Alto households would each receive $2,500 from the tax proceeds. The balance would go to the state of California for general government functions.
In addition, the measure would impose a 40% "exit tax" on any resident with a fortune of more than $50 million and who is relocating either abroad or to a place within the United States that doesn't have an equivalent wealth tax.
Creaven said he was spurred to action by the recent growth in wealth inequality in the country. While he sees a certain amount wealth inequality as a natural and acceptable byproduct of capitalism, he believes it has gone "unchecked" and is spiraling out of control.
"When you have runaway wealth inequality, you start to see societies start to collapse. It's a pretty dangerous thing," Creaven told this news organization.
The initiative states the extreme wealth inequality has historically functioned as "a catalyst for severe unrest, and social and political instability."
"The State of California, and particularly the City of Palo Alto, are experiencing an unprecedented degree of wealth inequality that is making both the State and City vulnerable to severe instabilities," the initiative states. "An efficient way to swiftly taper extreme wealth inequality in Palo Alto, would be to levy the taxes referenced in this Initiative, and to give every resident a one-time stimulus check."
Creaven said his team is just starting the effort to collect the 2,392 signatures that would be needed for each of the two initiatives, with plans to set up tables in prominent commercial areas. But even if he gathers them, the proposal could be a tough sell. As a "special tax," it would need approval from a two-thirds majority of voters (Creaven said if it fails, it could return as a "general tax," which would require a simple majority).
While Palo Alto voters have supported increases to the city's hotel tax rate in recent years, they also rejected the city's effort in 2009 to pass a business tax. The city was preparing to bring back the business tax measure this year, but opted to scrap the effort in March because of the economic shutdown.
Even if the measure meets the high threshold for passage, it will likely meet legal challenges, much like the wealth tax that Seattle voters approved in 2017. That tax imposed a 2.25% rate on individuals with incomes above $250,000 and on married couples with incomes more than $500,000. The Washington state Court of Appeals had found the tax to be unconstitutional. The appeals court also concluded that an existing law that bans cities from adopting income taxes is illegal, leaving the ultimate decision on the 2017 measure for the state Supreme Court.
Creaven noted that Warren's wealth tax proposal was surprisingly popular. Even if the Palo Alto initiative fails, he believes the idea's time has come.
"A wealth tax is eventually coming, whether through this initiative or one written through a different (process). It will get here," Creaven said.
Creaven also hopes to pick up some momentum on the Clean Vehicle Initiative, an effort that would ban the sale or leasing of gasoline vehicles that cost more than $50,000 pre-tax, beginning Jan. 1, 2021. It would also add a 2.5% sales tax on gasoline cars that are valued at more than $50,000 and bought outside of Palo Alto but registered in the city. Revenues from that tax would go to the city's general fund.
The bill would exempt commercial vehicles, RVs and vehicles manufactured before 2021.
Creaven said he was spurred to action after seeing other nations, including France and the United Kingdom, create plans for banning cars with internal combustion engines before 2040. The failure of the United States to set a similar goal was a disappointment, he said. He said he believes the initiative is politically feasible because "the majority of people aren't buying gas cars that are over $50,000."
The initiative argues that there will "never be a convenient time to fight climate change, but that's no excuse to ignore it."
"We need to fully embrace carbon neutral technologies as we create them, not decades after their inception," the initiative states. "This initiative is an opportunity for Palo Alto to enact the first (partial) ban on gasoline cars in the country. Palo Alto is a small city, but meaningful ideas often start small on the west coast before spreading throughout the rest of the country."