Mark Cuban, Rep. Khanna Clash Over California Billionaire Wealth Tax Proposal

Mark Cuban publicly criticized Rep. Ro Khanna's defense of California's proposed 5% one-time tax on billionaire wealth over the weekend of Aug. 15, arguing the measure would unfairly burden startup founders whose net worth is tied up in illiquid company shares. Cuban, who said he paid $288 million in taxes in a single year and takes no issue with taxation itself, called the proposal the "biggest F you in the history of entrepreneurship" and said he would require future multi-billion dollar startup investments to leave California if the measure passes.
Khanna proposed a government loan structure to address the liquidity problem, in which California would lend illiquid founders money secured against their shares, to be repaid in cash or via the state taking the shares in default. Cuban pushed back, warning that scenario could make California a stakeholder in private companies. Khanna countered that roughly 72% of billionaire wealth nationally sits in liquid public stock, and named executives including Jensen Huang, Lisa Su, and Sundar Pichai as unlikely to need such a loan, according to Bloomberg. The proposal has also drawn criticism from Anduril co-founder Palmer Luckey and investor Bill Ackman.
The measure, known as the Billionaire Tax Act, would apply a one-time 5% tax on the net worth of California residents worth more than $1 billion as of Jan. 1, 2026, covering stocks, bonds, private business interests, art, and intellectual property, according to CalMatters. Backers led by SEIU-UHW estimate it could raise close to $100 billion, with 90% earmarked for healthcare. California's Legislative Analyst's Office has warned the state could lose hundreds of millions in annual income tax revenue if billionaires relocate, and Google co-founders Larry Page and Sergey Brin are among several who have already moved assets or residences ahead of the vote. Opposition has raised more than $118 million against the measure. Even California Governor Gavin Newsom opposes the state proposal, despite his broader support for taxing the wealthy.
Separately, Khanna and Sen. Bernie Sanders have pushed a federal wealth tax bill, though JPMorgan does not expect Congress to seriously consider it for at least another two and a half years, according to TheStreet.