Rep. Ro Khanna Defends California Billionaire Tax Proposition
Rep. Ro Khanna, identifying himself as a “progressive capitalist,” voiced his support for taxing California billionaires through Proposition 40, stating, “You didn’t build this money yourself.”
Khanna discussed the proposed “wealth tax” on California’s more than 200 billionaires during an appearance on the podcast Conversate with Killer Mike. The conversation focused on Proposition 40, a measure set to be voted on in the upcoming election cycle, which would impose a one-time, 5 percent tax on billionaires. This would mark the first tax of its kind in the U.S., aimed at funding the state’s healthcare system.
Despite its intentions, the measure faces significant backlash, including from some Democrats, notably California Governor Gavin Newsom, who cautioned that it might inadvertently drive wealth out of the state. Additionally, two other propositions, 41 and 42, will be on the ballot; if passed, they could negate Proposition 40. Proposition 41 seeks to mandate audits of new tax programs, while Proposition 42 aims to prohibit new state personal property taxes and certain retroactive taxes.
Killer Mike raised concerns to Khanna, an Indian American, about how he addresses worries from culturally similar high earners now facing potential new taxes. He asked, “If you’re representing the highest earners, what do you say to those who feel, ‘Now that we’ve finally made it, why tax us?’”
In response, Khanna asserted, “The public isn’t afraid. The billionaires are afraid,” adding that many of them are not paying taxes. He explained that while high earners such as lawyers or investment bankers are taxed significantly, it’s a different scenario for billionaires who accumulate wealth through asset appreciation rather than conventional income.
He elaborated, “These billionaires aren’t paying taxes—not because they’re breaking any laws, but because they’re just holding onto their companies as they grow.” He made the case for the proposed tax as a way to ensure that the wealth generated benefits society, arguing that many of these billionaires owe their success to government-funded infrastructures like the Internet and AI research.
Khanna pointed out that the wealth of billionaires has surged by 144 percent in recent years, suggesting that a modest tax could redistribute some of those gains for public benefit. He emphasized, “You were entrepreneurial, sure, but why not pay 5 percent?”
Addressing the reluctance of politicians like Newsom, Khanna suggested that there’s concern among Democrats about alienating wealthy donors, which is crucial for funding campaigns. He described an internal struggle within the Democratic Party, challenging them to choose between being aligned with progressive ideals or remaining tied to corporate interests.
Khanna, alongside Senator Bernie Sanders, is also behind federal legislation aimed at implementing a nationwide 5 percent annual tax on billionaires, named the “Make Billionaires Pay Their Fair Share Act.”
