Ro Khanna faces tech backlash over wealth tax

Democratic Rep. Ro Khanna has embraced a wealth tax in his home state of California, and his longtime allies in Silicon Valley are now threatening to abandon him.

Labor groups in California are trying to place a proposal to impose a statewide tax on billionaires on the November ballot. The proposal is causing a rift among Democrats and angering some in the tech community. will leave state if the measure is adopted.

Khanna reacted to potential immigration on social media last week to mailHe says he echoed what President Franklin Delano Roosevelt said “when economic royalists threatened to leave, he quipped, ‘I’m going to miss them so much.'”

The post not only sparked criticism from tech leaders but also calls for Khanna to be prioritized.

“Ro has gone on a sprint that has alienated all the moderates I know support him. Including me,” wrote Martin Casado, a partner at venture capital firm Andreessen Horowitz. to mail About X. “At least that makes voting for him even more satisfying.”

“It’s time to prioritize it,” wrote Garry Tan, CEO of startup accelerator Y Combinator.

Andreessen Horowitz and Y Combinator partners are among the biggest donors to Khanna’s congressional campaign committee, according to the latest campaign financial disclosures.

Proposed ballot measure, Billionaire Tax Act of 2026It is supported by the Service Employees International Union-United Healthcare Workers West labor union. If enacted, the bill would impose a one-time 5% tax on the assets of California billionaires to offset an expected shortfall in the state’s health care budget.

If the measure garners enough signatures to get on the ballot, it will be up to California voters to decide whether to impose the tax, which would be retroactive to Jan. 1, 2026.

A major reason why tech investors, executives, and entrepreneurs have united in vocal opposition is concern that the tax will apply to unrealized gains. This means startup founders with a net worth of over $1 billion based on the paper value of their privately held shares will have to pay taxes on their wealth, even if it is illiquid.

“We will absolutely need to figure out how our society will adapt to the rapidly growing wealth gap,” Reddit co-founder and venture investor Alexis Ohanian wrote. to mail Sunday. “But the answer is definitely not taxing unrealized gains.”

Rep. Khanna’s spokeswoman, Sarah Drory, told CNBC that the congressman is “a passionate supporter of technology and entrepreneurship,” noting that he co-authored CHIPS and the Science Act, a federal program designed to increase domestic semiconductor manufacturing.

Drory said Khanna supports “a modest wealth tax on billionaires to tackle staggering inequality and ensure people have healthcare,” while also advocating “common-sense workarounds for startup founders whose companies are unprofitable and have illiquid stocks.”

Democratic California Gov. Gavin Newsom, who is considered a candidate for president in 2028, opposes billionaire taxes at the state level.

“You can’t isolate yourself from 49 [other states]Newsom said in the New York Times Dealbook: conference earlier this month. “You have to be pragmatic about this.”

But pressure is growing nationally for Democrats to back efforts to tax the wealthy, as polls show broad support for the idea. A Pew Research Center questionnaire Earlier this year, it was revealed that 58 percent of Americans support increasing taxes on those earning more than $400,000. 74 percent of Democrats surveyed supported higher taxes.

RepublicansMeanwhile, they are making increasing inroads in Silicon Valley, which has traditionally been home to a number of Democratic-leaning tech billionaires.

Tech CEOs have flocked to the White House this year to curry favor with President Donald Trump, who has placed tech leaders in roles in his administration.

Khanna carries California’s 17th Congressional District by more than 100 points 30 points The dark blue seat is unlikely to flip to Republicans in 2026.

In a follow-up post on X, Khanna reiterated his support for a wealth tax.

“Yes, we need entrepreneurs to commercialize disruptive innovation,” Khanna said. “But the idea that they won’t start companies or leverage a cluster of innovations to make billions of dollars if a 1-2 percent tax is imposed on their staggering wealth defies common sense and economic theory.”

Vinod Khosla, founder of Sun Microsystems and Khosla Ventures, has a net worth of approximately $12.6 billion. ForbesHe disagreed with Khanna and said billionaires would leave the state.

“You are so wrong, Ro,” Khosla said. send to x. “It is almost certain that those with high potential to create wealth in the state will leave the state. Every consultant would advise any business that is gaining major momentum to have key people move to another state.”

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