Six Flags Over California: Plans To Split State Approved

Silicon Valley venture capitalist, Tim Draper, may just have the clout and connections to pull this off.

Draper, who made his fortune investing in internet startups, like Skype and Hotmail, believes California’s simply too populated and diverse to adequately address demands of its residents, according to his plan.

“Vast parts of our state are poorly served by a representative government dominated by a large number of elected representatives from a small part of our state, both geographically and economically,” the plan reads.

Initiative aims are to split the state of some 38 million inhabitants into “six smaller state governments, while preserving the historical boundaries of the various counties, cities and towns.“

With the current structure, California is “ungovernable,” Draper told USA Today.

“‘Six Californias’ allows a refresh,” he added.

If Draper’s plans for California become a reality, the bulk of the state’s wealth, centered on Silicon Valley, home to a number of household tech names, including Google and Facebook, and South California, which is the seat of Hollywood and the US entertainment industry.

Jefferson, North California, West California and South California would be forced to fight over a dramatically reduced tax pie.

Tax haven California-style?

Instead of redressing the myriad problems now affecting the citizens of California, however, Draper believes carving up the state is the answer.

In a recent interview, the managing partner for Draper Fisher Jurvetson said California’s poorest regions “are not happy” because the system is “not working for them.”

“So if they had their own state, I believe all of those states would become wealthier. And I believe by managing their own state, they will become much more successful,” Draper told Time.

Although Draper’s plan encourages “regional cooperation,” the six-state scheme will also create competition between the states, which, according to the plan, “will lead to better and more responsive governance.“

That means that states with high-growth sectors, like the proposed state of Silicon Valley, which in 2012 ranked eighth in global GDP rankings, according to the Center for Continuing Study of the California Economy, and the state of Central California, home of Hollywood, would have an unfair advantage when it comes to collecting tax revenue.

Critics say the ‘Six Californias’ campaign is nothing more than a scheme to ensure taxes of wealthy individuals, like Draper, get ‘redistributed’ inside their own affluent neighborhoods.

The proposed initiative comes at a time when an increasing number of corporations – many from Silicon Valley – are hiding their tax dollars overseas, avoiding the tax man altogether.

The top 10 corporate tax avoiders happen to be tech companies:

1. Microsoft, $76.4 billion 
2. IBM, $44.4 billion 
3. Cisco Systems, $41.3 billion 
4. Apple, $40.4 billion 
5. Hewlett-Packard, $33.4 billion 
6. Google, $33.3 billion 
7. Oracle, $26.2 billion 
8. Dell, $19.0 billion 
9. Intel, $17.5 billion 
10. Qualcomm, $16.4 billion 
Source: Bloomberg, August 2013

Draper’s initiative will require at least 807,615 petition signers, or 8 percent of total votes cast in the 2010 gubernatorial elections by July 18 to make it on to the November ballot.

Source: Russia Today

Photo Credit: Photo by Jimmy Emerson / flickr.com