Aug 17, 2026
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Add us on GoogleMark Cuban has issued a stern reality check for those championing an unprecedented new tax on billionaires in California.
Opinions on the proposed levy are pretty evenly split as we approach the November 3 vote, when constituents will vote on 14 measures, including the contentious motion to take a 5% cut of all assets owned by the state’s richest residents to funnel into healthcare, schools and food assistance programs.
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As figures like Democratic Representative Ro Khanna position the move as a way to “stand up for the working class over the billionaire class” — pitting the average American against the most financially successful, who they feel increasingly alienated from amid the ongoing cost-of-living crisis — others, including Cuban, are raising alarms about key issues with the potential legislative changes, known as Proposition 40.
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Why taxing billionaires can be difficult
In a lengthy X post, Cuban responded to Khanna’s latest video touting growing support of the bill and provided the democratic representative with a business lesson in the process.
“A unique feature of these 10b [$10 billion] startups is that even if they raise a billion, little, if any of that money goes to the founders, who are now worth billions of dollars overnight,” Cuban explained in his post. “They are the definition of cash poor, stock rich.
“How are you going to tax them?” Cuban continued. “Make them borrow money against their shares, if they can? 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? Lol.”
While he prefaced his statement by saying he gets along well with Khanna, Cuban admitted he thinks “only idiot startup founders” will remain in the state if the tax ends up passing.
As someone who has become a household name by investing in budding businesses, the Shark Tank star added that, in that case, “you can bet if I’m investing in a multi-billion dollar startup, I’m asking them to move from California first.”
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Cuban’s post has garnered more than 3,300 reposts, 25,000 likes and 3.4 million views at the time of publication. Khanna himself replied, suggesting options like a non-recourse loan that uses stock as collateral in these cases — something others pointed out is “nearly impossible and against policy at practically every lender in America.”
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Wealth taxes are becoming popular
Governor Gavin Newsom, who supports a wealth tax at the federal level, agrees that Proposition 40 will inevitably drive wealth and jobs out of the region; and, a number of high-profile entrepreneurs and investors have indeed vowed to relocate elsewhere if it goes through.
While some believe this type of backlash is simply a form of crying wolf to prevent amendments from coming to fruition, multiple countermeasures to the ballot initiative have been launched, led by individuals like Google’s co-founders, who are intent on leaving the state and taking some 38% of the potential windfalls of the tax with them, if need be.
Similar wealth penalties have been popping up across the country as distaste for billionaires becomes common dominant discourse, especially among progressive, disenfranchised young people who push back against the idea of wealth concentration, deserved or not, when so many are struggling.
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Becky Robertson is a senior staff reporter at Moneywise and a lifelong writer. Along with more than a decade covering news at outlets like blogTO and Quill & Quire, she's attended writing residencies around the world. With 33 countries visited, she finds travel to be among her greatest inspirations.
