Ro Khanna Endorses California Wealth Tax for Medicaid Funding

Ro Khanna, a U.S. Representative for Silicon Valley, endorsed a California ballot initiative that would impose a one-time 5% wealth tax on residents with a net worth exceeding $1 billion. The revenue from the tax would be used to fund Medicaid. To address the challenge of startup founders with illiquid assets, Khanna proposed a government loan program. Under this plan, founders could pledge shares to pay the tax over 10 years, with the government eventually being repaid in cash or assuming ownership of the shares.

Business leaders including Bill Ackman, Mark Cuban, and Palmer Luckey criticized the proposal. They argued the plan could chill venture investment and lead to government ownership of private companies. Luckey specifically claimed the behavioral incentives of the loan repayment timeline were problematic.

Khanna defended the tax by stating that the Trump administration cut $30 billion from the state's Medicaid program. Critics of the initiative dispute the state's financial need for the revenue and questioned the legal implications of the loan system, specifically regarding the personal liability of founders if their companies fail.