Jason: All right, everybody. Welcome back to the All-In Interview Show. We're very lucky today to have a candidate for the governor of California who is extremely unique in a number of ways. First of all, he's a Republican. And second, he's a Brit. Welcome to the program, Steve Hilton. You've decided to increase the degree of difficulty in two ways, but you're polling fantastic. You've got five or six people in the polls. So, he's leading the field.

Jason: You're leading the field. Obviously, it's going to get narrowed a bit when the Democrats shiv a couple more people and get them out of the race and then pick their eventual winner in their cobble — whenever that happens when Nancy Pelosi picks who's running. But, Steve, maybe you could start by — sorry guys, I got jokes. But, Steve, maybe you could introduce yourself a bit and tell us why you're running.

Steve Hilton: Well, hang on. Can I just say just after that great intro where you just tried to kill my chances in just a couple of words. Thanks a lot, Jason. Really appreciate it.

Chamath: Let me actually tee this up. I've known Steve since 2012 2013 when he and his wife Rachel Wetstone moved to Silicon Valley. Rachel worked at Facebook initially and then she worked with you Jason at Uber and then has had a great run and then Steve similarly. And you said it in a funny way, but ultimately this is an incredible land of immigrants and Steve has a really compelling story. So before we jump into the questions, I know your background, Steve, but I do think it's important go back to your parents, your mom, how you grew up, and just set the stage for how you made it out from the way you started because I think that's important and then how you got to the United States and why.

Steve Hilton: Thank you. Thank you. I appreciate that. And you're right. We've known each other a long time now. And it's a great joy to be here. By the way, just want to say it's a great joy to be on a show where I don't have to wear the the suit and shirt. And you know, that's one of the things about running for governor that um I'm I'm loving most of it, but dressing up is not the favorite part for me. So, it's great to be with you. My parents are Hungarian. They were refugees from communism and I grew up in in England in a town called Brighton on the south coast and you know we just had a regular working-class um immigrant aspirational family story I guess. My stepfather's also a Hungarian. In 1956 when you had the Soviet invasion, he tells this amazing story. They heard on the radio, "The Russians are coming." And he and his brother and some friends from his school, he was 14 years old... and they just ran. They literally ran to the border, barbed wire fences, minefields got shot at by the guards. All that half of them were killed and he ended up in a refugee camp in Austria and from then to England. So all of that I guess just gives you that sense of real appreciation for actual for freedom for freedom and opportunity. After Oxford, I went back into politics when my friend David Cameron won that election and then worked with him to get the Conservatives elected when he became prime minister in 2010. Uh joined him in 10 Downing Street. I was senior adviser to the prime minister. And then in 2012, that's when we met. We moved here because Rachel was at Google.

Jason: Well, you're also notably you became naturalized. You're a citizen of the United States now. So you have dual citizenship. less people are confused by the accent. You're running for governor and you're a citizen of—

Chamath: Let's talk about your political setup. So, being a child of Hungarian immigrants raising communism, you're going to hear a certain version of what the role of the state is versus what the role of the family or the individual is. Then, growing up in the UK, I'm sure your attitudes either get cemented or change. Give us the setup. What is the political evolution of Steve Hilton? what did he believe and then what does he believe now and what has shaped these beliefs.

Steve Hilton: It's really I think it goes back to just around the when I first really started thinking about it all it was just as Margaret Thatcher was coming to power and you'd had the 70s in England were a disaster and a decade that was just the the economy was completely stagnant and slurotic unions ran everything. Um there was this period called the winter of discontent in 1979 when you had massive strikes um famously you know the dead went unburied and trash was piled up in the street just real collapse of everything and that's what thatcher came in to fix. I remember my stepfather, they weren't at all political, but he had this thing that stuck in my mind when he talked about Mrs. Thatcher's for the workers and labor are for the layabouts and I just this phrase stuck in my mind about the importance of work and hustle and I think about that all the time.

Chamath: Where do you think California is if you contrast?

Steve Hilton: Well, this is the the point I was just about to get to is we really are there. There are so many things I see in California today that are exactly like the UK in the 70s. You've got the massive dominance of the unions in policym. You've got a slurotic economy. You've got massively high taxation. I mean it was higher then... at one point I think the top rate when you add in the wealth taxes in the UK was literally 98%. By the way, Jason, just to be clear, I am a proud American now, but I'm not — I actually renounced my UK citizenship. I did that because I just wanted to be clear that I'm just — to borrow the title of the show, you be all in. All in. Literally.

Jason: And you have some to get into some maybe some policy. Taxes, I think, is the most unique and dare I say pretty populist. You want to have no state tax in California for people with under $100,000 in income and then a flat tax for everybody over 100K of but 7.5%. How is that possible? And is that something you've studied? And where did this come from?

Steve Hilton: The tax plan that um that I put out there, that was the first day of my campaign. I think of it as proworker and progrowth. But that fourth biggest economy data point underneath that you've got this with the state with the highest unemployment rate in the country and the highest poverty rate in the country tied with Louisiana. They found that over a third of Californians cannot afford to meet basic needs. So the starting point for my tax plan is what can we do quickly to help people who are really struggling. You've got people earning 70 grand, 80 grand, 90 grand in California. They are paying 9.3% state income tax. That rate is higher than the top rate in most states in America.

Jason: So cutting taxes this significantly means you have to then also cut spending.

Steve Hilton: Yes. Apart from anything else, the complexity is ridiculous of our tax system. These endless different rates is ridiculously complicated. Basically the the the cost of that in total is about an 18.5% reduction in revenue, which takes us back — it takes us down about 60 billion, which is not even going back to what the budget was just before the pandemic. If you look at the budget of the state of California, it's nearly doubled in the last 10 years. In the last 5 years it's gone up something like 75%. And so this is just bringing the budget back just to where it was roughly before the pandemic.

Jason: Let me just summarize. So if you make between 0 and $100,000 a year as a California resident under your plan, no tax — no state income tax. If you make $100,000 and a dollar and above, you pay 7.5% flat tax. Okay. How many Californians does that impact?

Steve Hilton: It's about 7 million households would benefit from from the under 100,000. I think that's about um probably just over a third, something like that.

Jason: Now the push back would be if we then take it dollar for dollar from the operating budget, programs will suffer. Well, not really because we're going to go back to 2019 2020 budgets and the difference was we spent a dollar in 2020, we now spend $2 and nothing has changed. So, yeah, go from $2 back to $150 and everything should be fine is your point.

Steve Hilton: Yes. And so we got to get back to even even without tax cuts, I would argue you've got to get back to a more reasonable growth in spending because we go bankrupt. I literally called it Cal DOGE — California Department of Government Efficiency. I know that's a controversial brand, but efficient government is something I think everyone would support. We've now published four separate fraud reports. Here's some specific examples. The second fraud report — $1 billion over the last 10 years... 100 million a year was allocated to be spent on climate change mitigation (solar panels for low-income apartments). Of that 1 billion total, the actual amount spent on the purported benefit was 72 million. 928 million actually went to nonprofits doing all all the usual Democrat associated stuff, voter registration, environmental justice campaigns. What percentage of it? averaged over the years it's about 80 billion a year. So it's around, you know, 20% or so.

Chamath: Let me ask about the broader cost of living for a second. Probably the most impactful cost to people's lived experience is the cost of housing. Double click into that for a second. For the 40 million residents of California, what is going on? Why are rents so high? Why are homes so expensive? And what can actually be done to make the cost of living and rent cheaper?

Steve Hilton: Three structural forces show why a Democrat can't fix it: union power, litigation and climate dogma. It just costs more to build anything in California. The same exact house cost two or three times more to build in California than in neighboring states. Building codes driven by climate dogma — you have to install EV charging and the scale of what's required just makes it more expensive. 70% of CEQA lawsuits are used to block housing. Most of those lawsuits are filed by unions — they're used as leverage to negotiate project labor agreements (union only). I had a meeting with a legislator: "Oh, I couldn't support you publicly." Why not? "Well, the unions would hate it. The unions run this place."

Sacks: This is the key. There's no equivalent to CEQA in Texas where I now reside. It's 30,000 per door in fees to the government in California. It's under a thousand in Texas. California still has the worst air quality in the country largely because of the addiction to cars and traffic. So I'm just trying to understand why hasn't the California government confronted this?

Chamath: Why is gas in California 7-8 gallon and why is it $3 everywhere else?

Steve Hilton: We are now importing nearly 80% of the oil that we use. Our number one provider is Iraq right now. In the name of Democrat climate policy, we are now expanding oil drilling in the Amazon rainforest in order to provide the right kind of oil for California's refineries. It's just so utterly insane and incoherent. CARB (California Air Resources Board) — miraculously the carbon emissions for the oil imports are only counted from when they're 12 miles off the coast of California. It's just so crazy.

Chamath: What's happening in the California education system? Why are we stripping away things like AP? And how do we tie compensation to outcomes?

Steve Hilton: We spend about 27,000 per student per year in California and we get some of the worst results in the country. For math it's 35%. The driver of this is really the grip on the government school monopoly of the teacher unions. Look at what works elsewhere: Mississippi. For one-third of their spend per student than California, their results are spectacularly better. Number one: phonics. Barely used in California. Second: reading by the end of third grade. If you don't pass, you repeat the year. That single change has transformed their results. And then a grade for every school and a grade for every teacher.

Jason: Crime and then homelessness. Major cities, they let people out for petty crimes under $950. Everything's locked up in drugstores.

Steve Hilton: California is brilliant at passing laws but not very good at enforcing them. Gavin Newsom shut down four or five state prisons. I've committed to stopping and reversing the prison closure program. Increase prison capacity in California. For homelessness — over 80% of people who are homeless have drug or alcohol problems or severe mental health problems. You got to have a 100% sober requirement for any kind of state services. Take the money that's currently going into the homeless industrial complex, these ridiculous apartment units costing $900,000 a door, and put it into modern large-scale mental health facilities.

Jason: Steve, as we wrap up, give us the quarterback view of your path to victory. Walk us through the sequence of events. What has to happen for you to get to Sacramento?

Steve Hilton: I'm leading in all of the polls. There's a majority for change in California. In 2024, President Trump in California got 6.1 million votes. To win, you're going to need just over half of that. Call it 5.9 million. The votes are there actually, even with just Republicans. I think that you've got a real opportunity to put together the kind of multi-racial working-class coalition because they get to vote directly for no taxes — no state income taxes. My whole plan is geared toward $3 gas. I call it Californable. $3 gas. Cut your electric bills in half. Your first 100 grand tax-free. A home you can afford to buy.

Jason: Steve, on behalf of all, I just want to say thank you for being so incredibly candid and open with us. We're wishing you the best of luck.

Sacks: I left for a reason and part of it was the dysfunction of the state. Having an unbalanced government that's all in one party is a way to do that. If you're in California, you have nothing to lose. I wish you great luck, Steve Hilton.