Mark Cuban is warning he will steer new companies away from California if voters approve a proposed billionaire wealth tax this fall. The billionaire investor spent the weekend criticizing the plan online and then took the argument to television this morning, Monday, August 17, 2026, on CNBC’s segment titled “California Rep. Ro Khanna debates billionaire tax with Mark Cuban, Bill Ackman,” hosted by Andrew Ross Sorkin. Cuban said he would not bring new companies to California if the billionaire tax passes, framing the threat as a business decision rather than a political stance.
The Illiquidity Argument
Cuban’s substantive objection centers on founders. He argued that founders of richly valued startups do not see much personal wealth flowing their way. A founder’s net worth is typically locked inside shares of a private or thinly traded company. A tax assessed on that paper valuation forces the founder to sell equity, borrow against it, or otherwise raise cash they do not have on hand. That differs from taxing a public-market billionaire with a liquid portfolio, which is why Cuban keeps returning to startups.
His weekend commentary was blunter. Benzinga reported on August 16, 2026 that Cuban said “Ideology is not a strategy.” Reporting on August 15, 2026 also carried his line that “Only idiot startup founders stay in Cali.” Coverage on August 17, 2026 reported he called the plan “insane.”
Two Different Proposals
The debate has blurred two distinct measures. The California ballot measure is a one-time 5% tax on billionaires’ wealth, applying to about 250 billionaires, headed to a statewide vote in November. Signatures were submitted by SEIU-UHW, a healthcare workers union, which estimates it would generate around $100 billion over five years, with 90% of revenue directed to the healthcare sector. It was introduced in response to California healthcare funding cuts stemming from President Trump’s “Big Beautiful Bill.”
Separately, Rep. Ro Khanna has teamed with Vermont Sen. Bernie Sanders on federal legislation establishing an annual 5% wealth tax on billionaires nationwide. The distinction sharpens Cuban’s illiquidity point. A recurring annual assessment on illiquid paper wealth compounds the cash-raising problem in a way a single one-time levy does not.
Khanna’s Pitch and Sorkin’s Political Read
Khanna framed his position around party alignment: “The California Democratic Party and the California labor movement just stood with Bernie Sanders and me in supporting a 5% wealth tax on 250 California billionaires. California voters want a Democratic Party that will stand up for the working class over the billionaire class.”
Sorkin pressed on the district-level paradox that Khanna represents Silicon Valley. Khanna, Sorkin said, “must believe that there’s enough people in his district who work at tech companies, but are not billionaires themselves, who somehow hold either so much animosity towards their overlords.”
Does the Relocation Threat Hold Up?
The empirical question is unsettled. A report from the University of Missouri School of Law suggests threats by billionaires to relocate may be strategic posturing. Suzanne Jimenez, SEIU-UHW chief of staff and an architect of the measure, told ABC News the warnings are “kind of the same scare tactic we see time and time again around any kind of campaign that is about investing in public services.”
California’s nonpartisan Legislative Analyst’s Office is more equivocal, writing that “It is likely that some billionaires decide to leave California. The reduction in state revenues from these kinds of responses could be hundreds of millions of dollars or more per year.” The tech and professional services base at stake is meaningful: California’s tech and professional services ecosystem represents 21.7% of state GDP according to Bureau of Economic Analysis data.
The Money War Around the November Vote
Spending has already scaled up. SEIU-UHW and associated political groups have contributed more than $31 million to a committee supporting the initiative, per ABC News. The opposition organization Building a Better California has raised more than $118 million from 10 donors, with more than half from Google co-founder Sergey Brin.
The group is backing two competing ballot initiatives, one on government transparency and one on protecting retirement savings from taxes. If either receives more votes than the billionaire tax measure, it negates it. Those campaigns have received around $48 million and around $49 million respectively since February, almost all from Building a Better California. Syracuse University’s Shana Kushner Gadarian described the tactic to ABC News: “My guess would be that the strategy is to just avoid the whole question of the billionaire tax … to be for something rather than against something.”
Brian Brokaw, a longtime Newsom adviser leading the opposition group Stop the Squeeze, told ABC News: “We’re not just talking about individual billionaires. You’re talking about an entire economy that is the backbone of California’s economic engine.” Jimenez warned of a “complete collapse” of California’s healthcare system if funding shortfalls go unaddressed. The California Budget and Policy Center estimates the state could lose as much as $30 billion in Medicaid funding annually as a result of the H.R. 1 cuts, and that as many as 3.4 million people could lose coverage.
What to Watch
The measure goes to voters in November. Gov. Gavin Newsom opposes the tax, per ABC News reporting from June 2, 2026, a notable split with a state party apparatus that endorsed the measure. In a May 5 debate, every candidate running for California governor except Tom Steyer voiced opposition. Steyer later told Wired the tax “doesn’t go far enough,” while adding he wants California to be “where the companies that are changing the world are begun and grow and stay.” Cuban invoked the same goal to reach the opposite conclusion. Investors watching California’s tech ecosystem will get their answer at the ballot box.
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