CA Governor Candidate Steve Hilton on Why California is Destroying Itself & How a Republican Can Win
Steve Hilton (ex-David Cameron senior adviser, Hungarian-immigrant origin, now naturalised Republican) running for Governor of California. Leading the GOP primary; Trump-endorsed. Tax plan: **zero state income tax under $100k** + **7.5% flat tax above** = ~18.5% revenue cut (~$60B), funded by reverting spend to pre-pandemic baseline (state budget ~doubled in 10 years). Says CalDOGE-equivalent audits estimate **~$425B of fraud/waste/abuse over 5 years (~$80B/yr ≈ 20% of CA spending).** Concrete energy numbers: CA imports nearly 80% of oil it uses (top supplier Iraq), down from being a net producer; 7 refineries left from 40; gas $7-8/gal; electric bills highest after Hawaii. Path to victory framed as 'California means to America what America means to the world.' Needs ~5.9M votes; Trump got 6.1M in CA in 2024 unprompted. Tech-relevant: explicit call-out that the proposed billionaire's tax would be 'a complete disaster for the tech ecosystem.'
Key points
- **Tax plan: 0% state income tax under $100k, 7.5% flat tax above.** ~7M households (≈one-third of CA) would go to zero state income tax. Funded by reverting spending to pre-pandemic baseline (CA budget nearly doubled in 10 years; up ~75% in 5). Katie Porter (D, opponent in race) has publicly endorsed Hilton's under-$100k tax cut.
- **CalDOGE fraud reports — quantified.** Hilton's team (with state-controller candidate Herb Morgan) estimates ~$425B of waste/fraud/abuse over 5 years = ~$80B/yr = ~20% of the $349B CA budget. Concrete examples: $1B Climate Change Mitigation Fund (~$929M went to nonprofits doing voter-registration / activism instead of solar); $350M cannabis-tax substance-abuse fund (similar diversion); $3.8B Project Homekey (mostly developer pockets).
- **California's 4th-largest-economy stat hides:** highest US unemployment rate, highest US poverty rate (tied with Louisiana), 1/3 of Californians 'cannot afford to meet basic needs' per United Way, 50/50 Chief Exec mag business climate ranking for 10+ years running. Read this as sustained outflow signal for Silicon Valley capital and talent.
- **Billionaire's tax as the explicit Silicon Valley exodus catalyst.** Hilton: 'I just sit down with so many business people. We are on the brink of leaving.' Direct read on the political risk to the bucket-3 'agent-using' valuations from the 20VC framework — those companies physically resident in CA are exposed to additional state-level tax shock.
- **Energy data points:** CA imports ~80% of its oil despite significant in-state reserves; #1 supplier is **Iraq**, then Ecuador/Brazil. Down from 40 refineries to **7**. CA refineries built for heavy crude → forces Amazon-rainforest oil expansion to feed them (transported on bunker-fuel tankers — most polluting transport form). CARB only counts emissions 12 miles off coast. 'CalGEM' agency permit-denials are the actual mechanism throttling production — fixable by gubernatorial appointment without legislature, can 'double production every two years.'
- **Education numbers:** CA spends $27,000+ per student per year (near US-highest). Outcomes: 47% meet basic English/reading standards; 35% meet basic math. Mississippi spends 1/3 as much per student with dramatically better results — credits structured phonics + third-grade-reading-or-repeat policy + per-school/per-teacher public grading.
- **Prison closures as the crime-driver.** CA cut state prison capacity from 165k (2006) to 93k. Catch-and-release become operating norm at county level → undermines law enforcement morale → undermines reporting → public confidence collapses. Hilton commits to reversing prison closures. Recidivism rate 2x Virginia's.
- **Homelessness three-point plan:** (1) enforce existing illegality of street encampments (Grants Pass v Oregon 2024 removed Boise-ruling cover); (2) sobriety-required shelter (Newsom vetoed Sober Housing Act despite Democrat-legislature passing it); (3) end Medicaid IMD 16-bed-cap rule via the Trump-1 IMD waiver (CA hasn't taken it up, redirect Homekey-style spending into modern large-scale mental health facilities).
- **Path-to-victory math.** CA top-two primary; ballots out early May. Trump-endorsed. Estimates 11.7M total midterm votes → ~5.9M to win. Trump got 6.1M in CA in 2024 with no campaign spend. Voter-ID on November ballot drives Republican turnout. Strategy: Trump-style multiracial working-class coalition, anchored by 'Cal Affordable: $3 gas, electric bills cut in half, first $100k tax free, no tax on tips, a home you can afford to buy.'
- **Hilton's reform credentials:** Hungarian refugee parents; Cameron's senior adviser in 10 Downing Street, was part of UK coalition-government negotiating team. Renounced UK citizenship to be 'all-in.' This is the real reason this episode is on All-In rather than a regional politics show: a credible center-right reform package being trial-ballooned to the Silicon Valley investor base.
Notable quotes
Our team's estimate is about $425 billion of fraud, waste and abuse over the last five years — about $80 billion a year, roughly 20% of the budget.
Of $1 billion allocated to climate change mitigation, only $72 million was actually spent on solar panels. $928 million went to nonprofits doing voter registration and environmental justice campaigns.
We import nearly 80% of the oil we use. Our number one provider is Iraq. We've gone from 40 refineries to 7.
We spend $27,000 per student per year. 47% meet basic standards in reading. 35% meet basic standards in math. Mississippi spends a third of that with spectacularly better results.
If the billionaire tax proposal goes through, that is a complete disaster for the tech ecosystem and what we've built in Silicon Valley.
California means to America what America means to the world.
Themes
- California as a structural-decline case study
- Billionaire's tax as the Silicon Valley exodus catalyst
- CalDOGE-style audits exposing 20% waste in state budget
- Energy / refinery / permitting mess driving 2x national gas prices
- Republican path to CA governorship is mathematically open
Mentioned
People
Companies
Ideas
- 0% state income tax under $100k + 7.5% flat tax above
- $425B of California fraud/waste/abuse over 5 years (~20% of budget)
- California unemployment + poverty rates highest in US
- Billionaire's tax as Silicon Valley exodus catalyst
- 80% of CA oil imported (top source Iraq)
- 40 → 7 California refineries
- 12-mile offshore CARB emission boundary
- CalGEM permit-denial as throttling mechanism
- Phonics + third-grade-reading-gate as Mississippi reform
- Per-school per-teacher public grading
- Prison capacity 165k → 93k as crime driver
- Grants Pass v Oregon 2024 removing homeless-encampment legal cover
- Sober Housing Act veto (Newsom)
- Medicaid IMD 16-bed-cap rule + IMD waiver
- Trump-style multiracial working-class coalition CA play
- Top-two primary path 5.9M votes / Trump 6.1M in 2024