Mark Cuban clashes with Ro Khanna over California billionaire tax, warns startups will flee

A public dispute erupted between billionaire entrepreneur Mark Cuban and Democratic Congressman Ro Khanna over California's proposed 5% wealth tax on billionaires. The exchange took place on social media platform X, where Cuban accused Khanna of not understanding business and warned that the tax would drive startup founders and investors out of California. The measure, endorsed by the California Democratic Party, aims to tax the net worth of billionaires, but Cuban argued that many founders are 'cash poor, stock rich' and would be forced to sell their companies or leave the state to pay the tax. Khanna proposed a solution allowing founders to pledge shares as collateral for a government loan to cover the tax, with repayment due in about ten years. Cuban dismissed this as 'insane,' arguing that even successful founders might not have $250 million in liquid assets to repay the loan. Khanna countered that most billionaires hold liquid assets and that the mechanism would only apply to 'paper billionaires.' The debate highlights the tension between progressive taxation and concerns about economic competitiveness, with Cuban warning that only 'idiot startup founders' would stay in California if the tax passes. The exchange underscores the ongoing national debate over wealth inequality and tax policy, and the potential impact on innovation hubs like Silicon Valley.