While Nvidia CEO Jensen Huang said he’s “perfectly fine” with it, many others aren’t, including LinkedIn cofounder and major Democratic donor Reid Hoffman, who called it “horrendous” for innovation. Meanwhile venture capitalist Peter Thiel as well as Google cofounders Larry Page and Sergey Brin have already taken steps to sever ties with the Golden State just in case it qualifies for the November ballot and passes.

The proposal calls for California residents worth more than $1 billion to pay a one-time tax equivalent to 5% of their assets. The payment can be made over five years. The union pushing the measure, the Service Employees International Union-United Healthcare Workers West, has estimated the wealth tax could raise $100 billion in revenue and help offset federal cuts to health spending.

But one tech investor offered alternatives while acknowledging a massive loophole that the rich use to get around paying income taxes.

During a recent episode of the All-In podcast, cohost David Friedberg characterized the potential ballot initiative as more of an asset seizure—one that could be renewed beyond a year and set a precedent for similar ones elsewhere.

“It’s totally reasonable to say that billionaires aren’t paying their fair share of taxes, and it’s totally reasonable to say that ultra-high net worth people aren’t paying their fair share of taxes,” he said. “They pay an income tax. But the truth is a lot of ultra wealthy people borrow money against their assets and live off of that borrowed money. So they never have to pay taxes by selling the stuff that they own.”

Friedberg described the “buy, borrow, die” strategy of avoiding income taxes by living on debt that doesn’t get paid off until after the borrower dies. Then the heirs settle any outstanding loans by selling the deceased’s assets, and the gains that piled up during their lifetime aren’t subject to taxation.

In Friedberg’s view, it’s this practice that the proposed wealth tax for California is really trying to tackle.

“There’s a simple way to address it, which is to charge them a capital gains tax if they borrow against their assets that they haven’t paid capital gains tax on,” he added. “Very simple. That can resolve this.”

Another way to approach the issue would be to raise the capital gains tax, Friedberg said, though he doesn’t personally support doing that.

Those levies apply when assets like real estate or stocks are sold, but he explained that hiking them instead of relying on a wealth tax would make it function more like an income tax.

A group of California billionaires are also arguing about the wealth tax on a Signal chat, according to the Wall Street Journal. In that running back-and-forth, other alternatives that have come up include giving the government illiquid stock as a zero- or low-interest loan for a certain number of years and taxing stock that’s already public.

Opponents of the tax have warned about the impact it could have on economic growth and startups, while supporters point to the AI boom and say California’s ultra-rich would still be among the world’s wealthiest, sources told the Journal.

The tax has also split California’s Democratic lawmakers. Gov. Gavin Newsom is against it, while U.S. Rep. Ro Khanna is for it. But even the congressman has conceded the language needs some work and doesn’t want illiquid stakes or voting shares to be taxed.

Newsom told The New York Times on Tuesday that he was relentlessly working behind the scenes against the proposal, and he would continue to oppose it, even if it reached the November ballot.

Palmer Luckey, cofounder of defense tech startup Anduril, has said the tax would force founders to sell big pieces of their companies if privately held shares, which are commonly used as compensation in startups that aren’t yet profitable, grow in value.

Meanwhile, Y Combinator CEO Garry Tan recently warned that a provision in the ballot measure would value voting shares as equivalent to ownership stakes, putting holders on the hook for a much higher tax bill.

“This means if a founder holds shares representing only 3% of economic interest but 30% of voting control (through Class B supervoting shares), the tax would presume their ownership stake is at least 30% for valuation purposes, not 3%,” he said in a post on X on Friday. “The wealth tax is poorly defined and designed to drive tech innovation out of California.”

But Wall Street analysts are increasingly sanguine about the ruling. As time goes by, many say, the tariff issue becomes less and less dramatic. And in the bigger macro picture, they’re less significant than predicted.

The longer the delay in the ruling the more likely it is because the court is leaning toward Trump, according to JPMorgan.

“Legal experts continue to expect the Supreme Court to rule against the use of emergency powers [under the International Emergency Economic Powers Act] to authorize tariffs, but note that each week the Supreme Court delays its decision increases the likelihood of the Trump administration prevailing,” JPMorgan analysts Amy Ho and Joyce Chang told their clients. “Historically, SCOTUS reserves its most impactful decisions for the end of its term in June, which allows for extended deliberation.” Both Supreme Court cases on the Affordable Care Act were pushed to June, they wrote.

The pair also note that in the underlying case, only $135 billion in potential tariff refunds are at stake. 

Although Trump has touted the tariffs as a method of paying off the $38 trillion national debt, the reality is that collections so far have been too small to have much of an affect, according to James Knightley, ING’s chief international economist in the U.S. “Since April, tariff revenues are up $206 billion in those eight months relative to [fiscal] 2024, but not all are the IEEPA tariffs—they are estimated to perhaps be $130 billion. Sounds a lot, but the US is a $30 trillion-plus economy,” he told Fortune in an email.

“Many companies will be wary of drawing the ire of the president by claiming a refund and the hoops to jump through to reclaim through the courts could be quite onerous and deter others. Hence the actual amount that is reclaimed may be quite a lot less than $130 billion.”

Besides, he said, even if Trump loses the Supreme Court case he will likely reimpose the tariffs via some other regulation. “Given tariffs are a signature policy and the Republican polling isn’t looking very strong right now ahead of the midterms, the Administration will move swiftly to reinstate tariffs through other legally recognized routes. The promise of a $2,000 tariff dividend needs to be paid for somehow. This is merely shuffling money around seeing as Americans paid the tariffs in the first place only to get money returned, so it is difficult to argue this will be a major stimulus for the economy,” he said.

Tariff revenue is being generated at a current rate of $30.4 billion per month, for an annualized rate of $364.5 billion, according to data from Bloomberg provided to Fortune via Pantheon Macroeconomics. However, those revenues are already in decline as companies find workarounds and as Trump himself cuts deals, compromises, or delays the imposition of harsher measures. 

Convera analyst Antonio Ruggiero is also unruffled by the upcoming ruling. If the tariffs are ruled illegal, “we expect the immediate [foreign currency exchange] reaction to be limited, as the broader consensus is that alternative mechanisms will be found to keep tariff revenues intact.”

“That said, in the medium term, we cannot exclude the possibility of mild bearish pressure on the dollar tied to expectations of further uncertainty and erratic trade manoeuvres should the administration be forced to remove such tariffs, particularly at a time when USD sentiment is increasingly fragile amid concerns over Federal Reserve independence,” he advised clients in an email seen by Fortune.

Here’s a snapshot of the markets ahead of the opening bell in New York this morning:

• S&P 500 futures were down 0.15% this morning. The last session closed up 0.16%. 
• STOXX Europe 600 was flat in early trading.
• The U.K.’s FTSE 100 was up o.o5% in early trading. 
• Japan’s Nikkei 225 was up 3.1%.
• China’s CSI 300 was down o.6%. 
• The South Korea KOSPI was up 1.47%. 
• India’s NIFTY 50 was down 0.25%. 
• Bitcoin was at $92K.