By A simmering rift between Silicon Valley donors and Rep. Ro Khanna widened this week after prominent technology investors warned they may support a primary challenge in response to Khanna’s endorsement of a proposed California ballot initiative targeting billionaire wealth.
The initiative, now gathering signatures to qualify for the 2026 ballot, would impose a one-time 5 percent tax on California residents with net worth exceeding $1 billion. Backers say the measure could raise roughly $100 billion to offset gaps in healthcare funding following recent federal cuts. Nearly 875,000 valid signatures are required for the proposal to advance.
Khanna, who has represented California’s 17th Congressional District—covering much of Silicon Valley—since 2017, has long drawn campaign support from technology executives and venture capitalists. That support now appears increasingly fragile, writes The Daily Caller.
Over the weekend, venture capitalists Martin Casado and Garry Tan publicly criticized Khanna on social media, accusing him of abandoning moderate supporters. Casado wrote, “Ro has done a speed run alienating every moderate I know who has supported him. Including myself. Beyond being totally out of touch with that faction of his base, he’s devolved into an obnoxious jerk. At least that makes voting him the fuck out all the more gratifying.”
Supporters of the measure argue it would apply to roughly 200 California billionaires and affect only the top fraction of wealth holders. Khanna has characterized the proposal as narrowly targeted and consistent with broader Democratic efforts to address wealth inequality.
California Gov. Gavin Newsom, however, has voiced skepticism and is reportedly raising funds to oppose the initiative should it qualify for the ballot.
He no doubt understands that if it passes, it will end his 2028 chances. Speaking earlier this month, Newsom framed the issue within a larger political narrative. “It’s not something to be panicked about, but it’s part of the broader concern and narrative that’s developed in this country of the haves and have-nots, not just income inequality, but wealth inequality,” Newsom said. “We all want to be protected, we all want to be respected, we all want to be connected to something bigger than ourselves. We have fundamental values that I think define our party, about social justice, economic justice.”
Google co-founder Larry Page and Peter Thiel, a Los Angeles–based investor and ally of President Donald Trump, are also weighing whether to shift business activity out of California in response to the proposed tax, The New York Times reported.
Several technology leaders have warned of practical consequences for entrepreneurs and employers. Palmer Luckey, founder of defense technology firm Anduril, argued that the tax could force founders to liquidate major portions of their companies. “I made my money from my first company, paid hundreds of millions of dollars in taxes on it, used the remainder to start a second company that employs six thousand people and now me and my cofounders have to somehow come up with billions of dollars in cash,” Luckey wrote on Twitter. He added that such forced sales would amount to funding “fraud, waste and political favors for the organizations pushing this ballot initiative.”
But you don't actually oppose capital gains on unrealized income. You support this initiative. It is completely disingenuous to claim one position while campaigning for the opposite.
You are fighting to force founders like me to sell huge chunks of our companies to pay for…
— Palmer Luckey (@PalmerLuckey) December 28, 2025
Another Californian, Chamath Palihapitiya, one of the early executives at Facebook who has brought several companies public, showed how ridiculous Khanna’s plan is:
It’s not 1% a year for 5 years.
It’s a one time 5% tax on all assets and it will kill entrepreneurship in California.
Here is an example:
John Doe starts a company. He takes a nominal salary – say $150k for this example – and the rest in equity in the company. Let’s say he… https://t.co/zdq1bqovXX
— Chamath Palihapitiya (@chamath) December 28, 2025
Khanna, who gained national attention this year for bipartisan efforts to publicize government documents and for his earlier role in progressive campaigns centered on working-family economics, has not directly responded to the primary challenge threats. Married to a wealthy heiress, Khanna is one of the richest members of the House of Representatives.
Earlier in the summer, it was reported that he intends to run for president, hoping to follow the lead of Bernie Sanders, whose campaign he co-chaired in 2020.
He may have to survive 2026 first.
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