Democratic mayor of San Jose Matt Mahan opposes billionaire tax

The Democratic mayor of San Jose, California, opposed a statewide ballot measure asking voters to approve a one-time 5% tax on billionaires’ net worth.

Matt Mahan, who took office in the largest city of Silicon Valley in 2023, said the following in a series of speeches: x post It was said on Monday that the initiative would cost the majority of California residents.

“We need a rising economic tide that will lift all boats, not a political plan that will sink California’s innovation economy,” Mahan wrote.

San Jose’s population was just under 1 million as of mid-2024, the U.S. Census Bureau estimated. It is the third largest city in California, after Los Angeles and San Diego.

Tech investors and executives oppose the recent tax on billionaires, claiming it would cause companies and entrepreneurs to flee to other states. The issue has been particularly contentious for Democratic Rep. Ro Khanna, who supports the tax and whose district includes part of Silicon Valley; as onetime supporters in the tech industry threatened to throw their weight behind the primary rival.

“Even people who don’t expect this initiative to pass are still planning to leave because there will be another debate,” said billionaire investor Vinod Khosla. wrote at X late last month. “And California will lose its most important taxpayers and get much worse results.”

Venture capitalist David Sacks, who currently serves as President Donald Trump’s crypto and AI czar said in x last week “Austin will replace SF as tech capital.” Technology investor Peter Thiel and Google co-founder Larry Page considered leaving. New York Times reported.

“Driving billionaires out of state may feel good in the short term, but working people will (as they almost always) pick up the brunt of this political maneuvering,” Mahan wrote Monday. “The long-term losers will be California families who will be asked to foot more of the bill for government services and infrastructure.”

Addressing income inequality, Mahan said, requires solutions such as “closing huge loopholes nationally that allow the wealthiest among us to never actually pay taxes on most capital gains.”

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 collects a sufficient number of signatures, it will be up to California voters to decide whether to impose the tax, which would be retroactive to Jan. 1, 2026. California will need about 875,000 signatures before putting the initiative to a vote.

A. report Some of the measure’s authors said the tax could raise $100 billion from the state’s 200 wealthiest people by 2031. There were more than 39 million people in California at the beginning of 2025 status data.

A major reason why tech investors and executives oppose this effort is concern that the tax would be applied to unrealized gains. This means startup founders with a net worth of over $1 billion based on the paper value of their private stocks will have to pay taxes on their wealth, even if it is illiquid.

Rep. Khanna’s spokeswoman, Sarah Drory, told CNBC in late December that Khanna supports “a modest wealth tax on billionaires to tackle staggering inequality and ensure people have health care,” while also advocating for “common-sense workarounds for startup founders whose companies are unprofitable and have illiquid stock.”

— CNBC’s Garrett Downs contributed to this report.

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