Progressive Democrats are pushing to build support for California’s contentious one-time 5% tax on billionaires, a measure set for the November ballot — but billionaire entrepreneur Mark Cuban offered a sharp rebuke Saturday to one of its most prominent backers.
Cuban criticized Democratic Rep. Ro Khanna over his support for the proposal, warning him that “ideology is not a strategy.”
Khanna, who is viewed as a possible 2028 presidential contender, had posted on X celebrating the California Democratic Party’s endorsement of Proposition 40, a move that puts the party at odds with more mainstream Democrats, including Gov. Gavin Newsom.
“California voters want a Democratic Party that will stand up for the working class over the billionaire class,” Khanna wrote.
Cuban, however, argued that Khanna was misreading the economic reality on the ground.
“Ro, I like you. You know that. But you need to read the state of the state,” Cuban replied to him on X.
The businessman pointed to California’s growing roster of “unicorn” startups, many of them driven by Silicon Valley’s AI boom. As investors pour billions into the sector, founders can see their paper wealth soar almost overnight — potentially making them billionaires before they have the cash to match that valuation.
“They are the definition of cash poor, stock rich,” Cuban said, arguing that taxing people in that position would be difficult.
“Do you really think each of multiple founders, who started an amazing company in Cali and is now a billionaire, can each just pull out $250m per billion of net worth from their raise? You know they can’t.”
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If Prop 40 passes, Cuban claimed businesses and investors, including himself, would definitely seek to avoid California; in fact, he said he would make it a requirement to not be based in California.
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“You can bet if I’m investing in a multi- billion dollar startup, I’m asking them to move from California first,” he said. “If this passes, only idiot startup founders stay in Cali.”
The congressman still seemed to not be convinced, replying to Cuban with a question on another potential way to tax billionaire startup founders even if their net worth isn’t in cash.
Californians are currently divided over Prop 40, according to a recent poll, which showed 48% support compared to 41% who opposed. About 11% are undecided.
It’s especially important for Prop 40 to garner as many “yes” votes it can as billionaires like Sergey Brin have poured money into competing ballot initiatives that may override it. Typically, the initiative that gets the most votes is the one that goes into effect.
The proposed tax has split Democrats, with many labor groups backing it as a way to offset federal health cuts but prominent figures like Newsom worrying it will destroy the state’s economy.
