Ro Khanna calls for fraud probe after California wealth tax firestorm
California Democratic Rep. Ro Khanna says he has a solution to this problem Silicon Valley elites angered by his embrace of wealth tax: Fighting fraud.
Over the weekend, Khanna faced criticism from some donors and allies in the tech industry after he approved a wealth tax. Labor groups in California are trying to put a proposal on the November ballot for a statewide tax on billionaires, prompting some wealthy Californians to warn about it. will leave the state, if it passes and supports Khanna’s primary opponent in next year’s election.
Khanna, who represents Silicon Valley, said in an interview with CNBC that he is launching a bipartisan effort from his post on the House Oversight and Government Reform Committee to root out fraud at the state level to ensure unexpected new taxes don’t go to waste. He said the effort would ensure funds go to health care and other essential services.
“If you want to advocate for Medicare for all, like I do, if you want to advocate for higher taxes, you have to have the trust of the public,” Khanna said. “People need to get a receipt for what their money is being spent on. You can’t allow corruption in government and waste in government and then expect people to support the progressive ideals that I have.”
Khanna is supporting Rep. Thomas Massie, R-Ky., who pushed for the release of files on notorious sex offender Jeffrey Epstein. He said he would find someone on the other side of the aisle to work on the issue, similar to his recent partnership with . Khanna said he hopes to produce a bipartisan Government Accountability Office report on state-level fraud and hold hearings on the issue.
U.S. Representative Thomas Massie (R-KY) speaks with U.S. Representatives Marjorie Taylor Greene (R-GA) and Ro Khanna (D-CA) at a press conference on the Epstein Files Transparency Act ahead of a House vote on the release of files on late sex offender Jeffrey Epstein on Capitol Hill in Washington, DC, USA on November 18, 2025.
Annabelle Gordon | Reuters
Khanna’s speech came after the California State Auditor made a new statement reports identified potential fraud in the state. Meanwhile, there have been some alleged cases of fraud in Minnesota. indictments This package, first distributed in 2022, also saw renewed national attention for the Republican Party. MPs And Trump administration.
Many critics of Khanna’s approval of the wealth tax cited these fraud cases as one reason why the tax did not work.
“If there are revenue gaps after audits and zero-based budgets, I would support a wealth tax,” said Chamath Palihapitiya, a prominent tech investor and Trump supporter. send to x. “Until then, you and people like you are getting more incentives for fraud, voter manipulation, and theft.”
Khanna said the new oversight effort was in response to “feedback from voters and leaders in my district” about embracing a wealth tax.
He added that the investigation would cover more than the fraud uncovered in California and Minnesota, and that finding a Republican partner would prevent the investigation from turning into a partisan issue.
“There will be no blue state or red state,” Khanna said. “Sure, there are reports in Minnesota and California, but it goes beyond that. We need to look at state government and not just make a case against the blue states, but also uncover where this fraud is happening and what we can do about it.”
California and Minnesota are led by Democratic governors. Former Democratic vice presidential candidate Minnesota Gov. Tim Walz is up for re-election in 2026. House Oversight Committee Chairman James Comer, R-Ky., called on Minnesota officials to testify before his committee.
Known as the California wealth tax proposal Billionaire Tax Act of 2026will impose a one-time 5% tax on the assets of billionaires in the state to close an expected shortfall in the state’s health budget. The Service Employees International Union-United Healthcare Workers West labor union is implementing this measure.
The measure still needs to collect enough signatures to get on the ballot. If so, it will be up to California voters to decide whether to implement the new tax.
Tech leaders who oppose the proposal worry the tax would be applied to unrealized gains; This means that startup founders with a net worth of more than $1 billion based on the paper value of their private stocks will be in a difficult situation, even though their wealth is illiquid.
Khanna acknowledged those concerns in the interview and said he supports a wealth tax on health care in California and at the federal level, but warned there are “workarounds for equity that are limited to illiquid founders with unprofitable companies.”
“You can do this with limited stock in a way that doesn’t hurt startup newspaper billionaires,” he said.
