You’re reading Dispatch Markets, a weekly dive into the forces driving economic growth—and those holding it back—featuring Scott Lincicome, Kyla Scanlon, Karl Smith, Marian Tupy, and Adam Ozimek.
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You → read → Lincicome
On October 21, Meta announced a 2-for-1 stock split, meaning that every Meta shareholder gets a second share for each one that they own.
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they → announce → that
Companies do this all the time, usually as a way to make a stock that trades at a lofty price feel a bit more approachable.
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that → do → price
A stock split doesn’t mean that everyone gets twice as rich (unfortunately!): It’s more like breaking a $20 bill into two $10s.
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It → mean → 10s
But if you read the 109-page filing, you’ll find that the split wasn’t really about the share price (or pursuing acquisitions, etc., as the company stated), but was rather the end result of a monthslong negotiation between Mark Zuckerberg and his own board over two things: 1) how to fund the company’s AI investments, and 2) a California ballot measure that would impose a wealth tax on billionaires.
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that → read → billionaires
The way that they settled things could change who controls Meta for years to come, and it gives us a lot of information on the future of taxation in the United States.
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it → settle → States
California’s Proposition 40 would impose a one-time 5 percent tax on the net worth of anyone who was a California resident on January 1, 2026, and is worth at least $1 billion when the state measures their wealth on December 31, 2026.
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state → impose → December
The tax hits about 200 people.
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tax → hit → people
If the measure passes—a result we might not know for weeks, though it’s currently losing by a decent margin—these 200 billionaires can pay their whole tax bill in April 2027 or spread it over five years (with interest).
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billionaires → pass → interest
The proposed tax is a tax on ownership, not on income, which makes it tricky.
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it → propose → income
Most of the taxes that we pay are on money that comes in (income tax) or goes out (sales tax), and this is a wealth tax, so it’s a tax on money that’s just sitting there (like a property tax on your house).
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that → pay → house
For most of the 200 people on that list, their wealth is in shares of a company they founded.
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they → found → company
Zuckerberg’s net worth is somewhere around $240 billion—depending on the day and the index you use—and more than 90 percent of his wealth is Meta stock.
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percent → depend → wealth
The tax on his $240 billion would come out to about $12 billion.
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tax → come → billion
As the fifth-richest person in the entire world, he can certainly afford it: A tax of 5 percent on someone who owns $100,000 worth of assets would be about $5,000, for context.
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who → afford → context
It’s nothing to sneeze at, but Zuckerberg would have to sell Meta shares to pay it.
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Zuckerberg → ’ → it
That could end up costing him more than just the $12 billion: It also threatens his control over the company.
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It → end → company
Zuckerberg has never been willing to run a company he could lose.
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he → run → company
He has always been in charge and has always voted down one-share-one-vote proposals.
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He → vote → proposals
The company’s whole structure exists seemingly to make him unfireable.
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him → exist → ?
Meta has two kinds of stock—Class A is what you and I can buy, and it has one vote per share.
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it → have → share
Class B gets 10 votes per share, and Zuckerberg owns most of them.
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Zuckerberg → get → them
It’s how he controls Meta: He owns only about 13 percent of the company while controlling about 61 percent of the votes through super-voting shares.
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He → ’ → shares
Votes matter a lot.
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Votes → matter → ?
Votes pick the board, and the board, of course, picks the CEO.
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board → pick → CEO
If you hold the majority of the votes, no one can fire you, ever.
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one → hold → you
Zuckerberg has been untouchable since Facebook went public.
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Facebook → go → ?
And he wants to keep it that way.
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he → want → it
The Meta board has had a problem for a while.
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board → have → while
In February, it created a special committee to figure out how to pay for the AI buildout.
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it → create → buildout
Management had presented three forecasts, and in each, Meta needed to raise hundreds of billions of dollars, starting within months.
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Meta → present → months
The obvious way to raise billions is to sell stock.
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way → raise → stock
But every new voting share created dilutes Zuckerberg’s majority (if there are 100 shares and you own 10, you own 10 percent, but if the company sells 100 more to raise money, you would now own 5 percent), and he told the board he would not support an equity raise that did so.
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that → create → raise
On July 8, according to the recent filing about the new share class, Zuckerberg told the chair of a committee that paying Prop 40 could force him to sell enough Class B to drop his voting stake to about 53 percent.
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paying → accord → percent
But one more tax hike or big AI fundraise could push him under it.
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hike → push → it
Within weeks, his lawyers were saying he was considering leaving California.
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he → say → California
Leaving wouldn’t have changed much, as Prop 40 would apply to anyone who lived in California on January 1, 2026.
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who → leave → January
What a move would have done is spared him California’s 13.3 percent income tax on shares he’d have to sell to pay the Prop 40 tax, and protect him if the “one-time” tax turned out not to be one-time.
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tax → do → him
Nothing really happened.
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Nothing → happen → ?
A few months later, Zuckerberg said he was listing his Palo Alto house in four days and reminded everyone that such a listing is public.
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listing → say → everyone
…and 108 more, not listed.
The Aporia
