America’s Richest School Khanna After Congressman Pitches Government Loans for Wealth Tax Payments

Congressman Ro Khanna is getting an earful after floating a widely panned idea of issuing government loans to the ultrawealthy so that they can afford a new five percent wealth tax that California voters may approve in the fall. Mr. Khanna, who himself is exceptionally wealthy and represents some of America’s richest investors in his Silicon Valley-based district, is pushing for the ballot initiative to establish the wealth tax despite some California Democrats warning of potential repercussions. Governor Gavin Newsom said earlier this year that the tax could see a large shift of wealth out of his state, arguing that “Wealth is movable, and it shops for the state with the lowest taxes.”That’s also the warning he got from billionaire businessman and Shark Tanker Mark Cuban, who told Mr. Khanna that his first piece of advice to individuals looking for investors is to move out of California. Mr. Cuban also found no uncertain irony in the government lending money to paper billionaires to pay taxes.“Ro, that’s insane. You want the state to loan money to the founder, who will then immediately give it back to the state as a wealth tax?” Mr. Cuban asked. “Meaning the state has not received any incremental receipts? What’s the point of that? Unless of course you want the gov to own shares (something I thought you criticized) and possibly have control … of companies who underperformed, (or the funding market changed), and couldn’t pay back their loans over those 10 years?” Mr. Cuban continued that many business founders can become billionaires overnight, though they are “the definition of cash poor, stock rich.” “They just raised money to grow their company and a bank will come along and loan them money ? A company that has been in business maybe less than a year?” Mr. Cuban asked. “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.”Mr. Khanna himself would not be subject to the potential five percent wealth tax because he is not a billionaire. The vast majority of his assets — worth hundreds of millions of dollars — are held by his wife and in family trusts. Wealthy Californians and other opponents of the proposed wealth tax are already spending millions on advertisements hoping to defeat the ballot measure. According to recent polling, the wealth tax idea is slightly favored to pass in November, with 48 percent of Californians supporting the measure and 41 percent saying they are opposed. Mr. Newsom is joined by the likely next governor of the state, Xavier Becerra, in saying a major drain of money will leave the state if the tax is made into law. Mr. Cuban, who does not live in California, said he won’t be impacted by the vote, but echoed the sentiment. “You can bet if I’m investing in a multi billion dollar startup, I’m asking them to move from California first,” he wrote, adding in his opinion, “if this passes, only idiot startup founders stay in Cali.”In response to the reactions, Mr. Khanna, clearly kicking around ideas online, also pitched another proposal — government-issued non-recourse loans which could be doled out with those new billionaires’ stocks being used as collateral. “Allow illiquid founders to pledge shares with a loan from the government to pay tax. The loan period is long but not infinite (e.g. 10 years). The loan is non-resource: at the end of the period, the loan is either paid back in cash, or the government assumes the shares,” the congressman wrote. Mr. Khanna was quickly hit with a Community Note, which is a crowdsourced response on X that clarifies or debunks a poster’s claims. “Non-recourse loans against private company stock exist but require mature companies with reliable income and are typically limited to low loan-to-value ratios (15-45%), making them infeasible for large amounts owed by young founders of unprofitable startups,” the note reads. Mr. Cuban has long supported Democratic candidates for office, and was heavily featured in Vice President Kamala Harris’s 2024 presidential campaign. He appeared with her on the campaign trail multiple times, though he has seemingly since mended his relationship with President Trump, having recently appeared at a White House event on pharmaceutical pricing.Other wealthy entrepreneurs — some fans of the president, some not — also joined in the discussion. “Great, so founders would have 10 years to speedrun their way to a giant pile (of) cash and forced to surrender their company to the government if they can’t do it fast enough. This is the worst idea you have proposed. By far,” wrote the founder of the weapons manufacturing company Anduril, Palmer Luckey, in response to Mr. Khanna. “The behavioral incentives are so obviously horrible.”“Why do we even need to have private companies?” the former head of product at X, Nikita Bier, asked facetiously. “The government can invent iPhones and electric cars.”Former Los Angeles mayoral candidate Spencer Pratt was more assertive in his reply. “This scammer is insane. This is full on communism. These stupid-smart guys will destroy society,” he wrote.Appearing Sunday on Meet The Press, Mr. Khanna did not discuss the wealth tax, but mentioned his district’s wealth in the context of a potential 2028 presidential bid. “I represent Silicon Valley, one third of the nation’s wealth, $20 trillion. It’s working for a few billionaires in a few places. But it’s not working for people I grew up with,” he said, adding that he wants to work on a new “new deal for America for our time.”

America’s Richest School Khanna After Congressman Pitches Government Loans for Wealth Tax Payments

America’s Richest School Khanna After Congressman Pitches Government Loans for Wealth Tax Payments

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