As progressives push for a contentious 5% one-time tax on billionaires in California set to appear on the November ballot, entrepreneur Mark Cuban offered sharp criticism of one of the tax’s key proponents on Saturday.
Mark Cuban, who is also a billionaire, took aim at Democratic Representative Ro Khanna, highlighting that “ideology is not strategy.”
Khanna, who may eye a run for the White House in 2028, celebrated on social media after California Democrats voiced support for Proposition 40 despite opposition from leading Democrats like Governor Gavin Newsom.
“Voters in California are looking for a Democratic Party that supports the working class instead of the billionaire class,” he stated.
However, Cuban argued that Khanna’s assessment of the situation was misguided.
“Ro, I like you. You know that,” he tweeted to Khanna. “But you need to read the situation in the state.”
Cuban acknowledged the increasing number of “unicorn” startups sprouting in California, fueled by support from Silicon Valley. With the surge in AI investment, these startups are often able to secure large amounts of funding, potentially turning founders into millionaires quickly, which complicates taxation.
“They are cash-poor but stock-rich,” Cuban said, explaining the challenges of taxing individuals in that position. “Do you really think that founders of successful companies can pull out $250 million per billion in net worth from their funding?”
Cuban expressed concern that if Prop. 40 passes, businesses and investors, including himself, might leave California. He even suggested he would insist on relocating before investing in significant startups. “If this passes, the only people left in California are foolish startup founders,” he added.
Khanna, seemingly unconvinced, responded to Cuban, exploring alternative ways to tax billionaire founders even if their wealth isn’t liquid.
Public opinion on Prop. 40 appears divided, with 48% of Californians in favor and 41% against according to recent surveys, and about 11% remaining undecided.
The success of Prop. 40 is crucial, especially since wealthy individuals like Sergey Brin are financing rival ballot initiatives that could negate it. Generally, the measure with the most votes is the one that gets enacted.
This tax proposal has caused splits among Democrats, with various labor groups backing it to counteract federal health care cuts, though some influential figures like Newsom fear it could harm the state’s economy.
