The Wealth Tax That Split California
A 5% tax on billionaire assets has put Rep. Ro Khanna at odds with tech veterans and some of the very voters who sent him to Congress.
In late December 2025, U.S. Congress member Ro Khanna found himself at the center of a firestorm. On one side were self-made founders who were decrying the U.S. government seizing their property; on the other, Khanna promoting “progressive capitalism.” But one thing was achingly clear: people were pissed off and ready to make moves, including literally moving. What exactly set it off? A proposal for a “billionaire tax” in California.
Under this new policy, those with over $1 billion in assets would have to pay a one-time 5% tax, with payments due in 2027. “We cannot have a nation with extreme concentration of wealth in a few places,” Khanna wrote on X, perhaps a surprise to his constituents. After all, he represents a California district that includes tech neighborhoods Cupertino, Fremont, Santa Clara, Sunnyvale, and parts of San Jose — which also have significant Indian American populations. Khanna ultimately concluded, “So yes a billionaire tax is good for American innovation.”
Yet, many tech founders, investors, and other Californians disagree. For founders who are rich on paper, but have illiquid assets, the policy seems ruinous. While these critics are okay with more taxes, they fear policies like this are just the first step in hollowing out what makes California great.