January 14, 2026
As Peter Thiel and other fat cats threaten to flee California over a billionaire tax, Khanna is bluffing.
Representative Ro Khanna speaks during an “End Fossil Fuels” rally near the U.S. Capitol on June 29, 2021, in Washington, DC.(Anna Moneymaker/Getty Images) Silicon Valley Rep. Ro Khanna has the distinction of representing more billionaires than any other member of Congress. Despite this – or perhaps because of it – he supports a state-level proposal that has infuriated some of his wealthiest voters: a tax on billionaires.
The measure could appear on the ballot this year and, if passed by voters, would apply a one-time 5% tax to billionaires who resided in California starting on the first day of 2026. The state would collect the payments in 2027 and the funds would be sorted into a dedicated account, with a large portion of the revenue earmarked specifically to fund health care.
“All of this is saying, ‘You have created unprecedented wealth. We want to make sure that there is some shared prosperity, that there are benefits for workers and the middle class,'” Khanna told me in an interview.
In response, a consortium of tech billionairesPalantir co-founder Peter Thiel, Google co-founder Larry Page, and venture capitalist turned Trump 2.0 crypto and AI czar David Sacks, among them, have threatened to leave the state for the greener pastures of national tax havens like Texas or Florida.
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But in reality, all those clenched fists and revving private jet engines mean one thing: the measure might actually work.
Thanks to Trump’s One Big Beautiful Bill Act, California’s Medicaid program is ready to lose $190 billion over the next ten years. This is in addition to the increase housing insecurity, stagnant wagesand the systematic shutdown of rural clinics and hospitals across the state. Meanwhile, in Silicon Valley, 15% of the wealth – in a region that is home to itself almost a third of the value of the US stock market – owned by only nine households. This cannot hold.
The Billionaires Tax promises immediate relief from these compensatory crises. Proposed by health sector unions, it would finance health care, education and food aid programs in California – and functionally neutralize some of the egregious tax breaks given to billionaires by the OBBA.
And beyond its impact on the Golden State, this measure would create a precedent. It was one thing for Bernie Sanders and Elizabeth Warren to include the wealth tax in their 2020 campaign platforms; it would be another thing entirely to see one happen in California — the state that Democrats across the country look to as a laboratory for experimenting with progressive public policies. After being the first in the country to implement a $15 minimum wage adopt the most aggressive posture climate and clean energyCalifornia has repeatedly expanded the boundaries of what is politically possible. A successful wealth tax would provide a model for lawmakers around the world.
And maybe that’s why billionaires talk about their “long term commitments” to the leases they signed last week. We saw these same panic songs and dances during Zohran Mamdani’s campaign: billionaires threatened to leave Park Avenue for Palm Beach, claiming that New York would become openly hostile to business. So far, they don’t have.
In fact, the rich are actually less likely move that the middle class— partly because it’s a lot harder to build a successful business and then drop it in Miami than tech CEOs would have you believe.
In their rush to disown California, tech founders seem to forget that Silicon Valley created them just as much as they created Silicon Valley. It has long been the global center of technological innovation because it is the place where capital, supporting infrastructure and human talent converge, not because a handful of genius messiahs happened to end up in Palo Alto.
And while some describe this political effort as a sort of punitive act of vengeance against the wealthiest Americans, Khanna argued to me that it is simply an effort to establish what he calls a “new technological social contract.”
“I have always supported innovation and the Silicon Valley ecosystem,” he said. But he also argues that “the social contract is that for those who have been given a lot, a lot is expected. And we find ourselves in a situation today where Californians are being denied health care…they’re closing rural hospitals, they’re closing clinics…if you build extraordinary wealth, then a nation only prospers if everyone in the community feels that life is getting better.”
Some of the most level-headed tech offspring recognize that this is not a big constraint on their success. NVIDIA’s Jensen Huang, who himself has seen his net worth increase by tens of billions in recent years, said he’s staying put.
“I didn’t even think about it [leaving] once,” he said in a recent interview. “We chose to live in Silicon Valley, and whatever taxes they want to impose, so be it. That’s totally fine with me.”
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However, at present, Huang’s optimistic attitude is the exception to the rule, contrary to Khanna’s expectations. He sees this tax as part of a fight for a system that both supports entrepreneurial risk-taking and provides a dignified standard of living for all.
“I was surprised by the panic about it,” Khanna said. “What I’ve tried to do is say, look. I celebrate the builders. I celebrate the entrepreneurs. I celebrate the innovators. I understand that people have taken an extraordinary risk in creativity, and that’s a good thing. But there is a social contract to ensure shared prosperity, and that’s what we need.”
Later in our conversation, I asked Khanna about the elephant in the room: what his support for a billionaire tax means for his country. political future in a region – and country – where the ultra-rich hold outsized political influence. Reports suggest that a number of tech moguls in California are conspiring to support a primary challenge against him (in secret Whatsapp chats, of course).
Khanna told me he wasn’t bothered.
“My values are those of the working class and middle class in my district and across the country,” he said. “And I’m not going to be cowardly or bullied into compromising my values. And I think at this point people want moral courage.”
Katrina Vanden Heuvel Katrina vanden Heuvel is editor and publisher of The NationAmerica’s leading source for progressive politics and culture. An expert on international affairs and American politics, she is an award-winning columnist and frequent contributor to The guardian. Vanden Heuvel is the author of several books, including The Change I Believe in: Fighting for Progress in the Age of Obamaand co-author (with Stephen F. Cohen) of Voices of Glasnost: Interviews with Gorbachev’s Reformers.
