January 14, 2026
As Peter Thiel and different fats cats threaten to flee California over a billionaire tax, Khanna is asking their bluff.
Silicon Valley Consultant Ro Khanna has the excellence of representing extra billionaires than every other member of Congress. Regardless of this—or possibly due to it—he’s backing a state-level proposal that has infuriated a few of his wealthiest constituents: a billionaire tax.
The measure might seem on ballots this yr, and if handed by voters, would apply a one-time, 5 % tax on billionaires who have been residing in California as of the primary day of 2026. The state would accumulate funds in 2027, and funds could be sorted right into a devoted account, with a lot of the proceeds particularly earmarked for healthcare funding.
“All that is saying is, ‘You’ve created unprecedented wealth. We wish to guarantee that there’s some shared prosperity, that there’s some profit to the working and the center class,” Khanna informed me in an interview.
In response, a consortium of tech billionaires—Palantir cofounder Peter Thiel, Google cofounder Larry Web page, and enterprise capitalist turned Trump 2.0’s crypto and AI czar David Sacks amongst them—have threatened to go away the state for the greener pastures of onshore tax havens like Texas or Florida.
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Actually, although, all these shaking fists and revving personal jet engines imply one factor: The measure would possibly truly work.
Because of Trump’s One Huge Lovely Invoice Act, California’s Medicaid program is set to lose $190 billion over the following ten years. That is on prime of accelerating housing insecurity, stagnating wages, and the systematic shutdown of clinics and rural hospitals throughout the state. In the meantime, in Silicon Valley, 15 % of wealth—in a area that’s itself dwelling to nearly one-third of the worth of America’s inventory market—is owned by simply 9 households. This may’t maintain.
The billionaire tax guarantees quick aid to those countervailing crises. Proposed by healthcare unions, it will fund healthcare, education, and food assistance applications in California—and functionally neutralize a few of the egregious tax breaks carved out for billionaires by the OBBA.
And past its affect on the Golden State, this measure would set a precedent. It was one factor for Bernie Sanders and Elizabeth Warren to incorporate wealth taxes of their 2020 marketing campaign platforms; it’d be one other fully to see one play out in California—the state Democrats nationwide flip to as a laboratory for experiments in progressive public coverage. From being the primary within the nation to implement a $15 minimum wage to taking essentially the most aggressive posture on climate and clean energy, California has broadened the bounds of what’s politically potential again and again. A wealth tax success story would provide a mannequin for lawmakers in every single place.
And possibly that’s why the billionaires are speaking about their “long-term commitments” to leases they signed final week. We noticed this similar panicked music and dance throughout Zohran Mamdani’s marketing campaign: Billionaires threatened to go away Park Avenue for Palm Seashore, claiming New York would develop into overtly hostile to enterprise. To date, they haven’t.
The truth is, the rich are literally less likely to maneuver than the middle class—partially as a result of it’s lots tougher to select up a thriving enterprise and drop it in Miami than tech CEOs would have you ever consider.
Of their haste to disavow California, tech founders appear to overlook that Silicon Valley made them simply as a lot as they made Silicon Valley. It’s lengthy been the worldwide hub of tech innovation as a result of it’s the place the place capital, supportive infrastructure, and human expertise converge—not as a result of a handful of genius messiahs coincidentally wound up in Palo Alto.
And whereas some painting this coverage effort as some form of punitive act of vengeance towards the wealthiest People, Khanna made the case to me that that is merely an effort to determine what he calls a “new tech social contract.”
“I’ve at all times supported innovation and the Silicon Valley ecosystem,” he mentioned. However he additionally argues that “the social contract is, to those that a lot has been given, a lot is predicted. And we’ve got a scenario now the place folks in California are being denied healthcare.… they’re closing rural hospitals, they’re closing clinics…. if you happen to’re constructing extraordinary wealth, then a nation solely thrives if everybody locally looks like life is bettering.”
Among the extra level-headed tech scions acknowledge that that is no nice imposition on their success. NVIDIA’s Jensen Huang, who himself has seen his web value develop by tens of billions in recent times, has mentioned he’s staying put.
“I’ve not even thought of [leaving] as soon as,” he mentioned in a recent interview. “We selected to dwell in Silicon Valley, and no matter taxes they wish to apply, so be it. I’m completely effective with it.”
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Nonetheless, proper now Huang’s sanguine perspective is the exception to the rule—opposite to Khanna’s expectations. He sees this tax as a part of a combat for a system that each helps entrepreneurial risk-taking and presents a dignified lifestyle for all.
“I used to be stunned by the freak-out over it,” mentioned Khanna. “What I’ve tried to do is say, look. I have a good time builders. I have a good time entrepreneurs. I have a good time innovators. I perceive that individuals have taken a unprecedented threat in creativity, and that’s an incredible factor. However there’s a social contract to verify there’s shared prosperity, and that’s what we want.”
Later in our dialog, I requested Khanna concerning the elephant within the room: what his help for a billionaire tax means for his political future in a district—and a rustic—the place the ultrarich maintain outsize political sway. Reporting means that quite a few tech moguls in California are conspiring to help a major problem towards him (in secret Whatsapp chats, after all).
Khanna informed me he’s not fazed.
“My values are with the working class and center class in my district and across the nation,” he mentioned. “And I’m not going to be a coward or intimidated into compromising my values. And I feel at this level, folks need ethical braveness.”
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