Billionaire entrepreneur Mark Cuban publicly opposed a proposed 5% wealth tax in California during a heated exchange with Representative Ro Khanna on August 15. The tax, part of Proposition 40, targets residents with over $1 billion in assets. It aims to fund health care and other public programs. Cuban criticized the measure, arguing it could drive entrepreneurs out of the state and hurt economic growth.
Cuban's Opposition
Cuban, who has often opposed wealth taxes, expressed concerns about taxing unrealized gains. He stated that Khanna, who supports the tax, "doesn’t understand business." Cuban's comments came as Khanna promoted the proposition, which is set for a vote in November 2026. Khanna has framed the tax as a way to ensure essential services for working-class Californians. He highlighted that 90% of the revenue would support state health care programs. The remainder would go to education and food assistance.
Background on Proposition 40
Proposition 40 came from a coalition led by St. John’s Community Health and SEIU-UHW. It has gathered enough signatures to qualify for the ballot. However, opposition from wealthy individuals has been strong. Some billionaires are reportedly leaving California to avoid the tax. The outcome of the vote remains uncertain, as debates continue over the economic impact of such a tax on the state's business environment.
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The proposed wealth tax could affect high-net-worth individuals. It may also influence the California real estate market, as some billionaires might seek to relocate to avoid the tax burden. Investors will watch for the upcoming vote in November 2026, which will decide the fate of Proposition 40.
Based on reporting by: fortune.com, forbes.com