Mark Cuban Blasts California Tax Proposal, Says He Won’t Bring New Companies to the State If It Passes

Mark Cuban is warning he will steer new companies away from California if voters approve Proposition 40, a proposed billionaire wealth tax heading to a statewide vote on November 3, 2026. The billionaire investor spent the weekend criticizing the plan online and then took the argument to television on 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 framed his threatened withdrawal from California as a business decision rather than a political stance.

The Illiquidity Argument

Cuban’s core objection is about founders, not billionaires in general. A founder’s net worth is typically locked inside shares of a private or thinly traded company, and a tax assessed on that paper valuation forces the founder to sell equity, borrow against it, or otherwise raise cash they simply do not have on hand. That problem is fundamentally different from taxing a public-market billionaire with a liquid portfolio, which is why Cuban kept returning to startups throughout the debate.

His weekend commentary on social media was blunter still. Benzinga reported on August 16, 2026 that Cuban said “Ideology is not a strategy.” Earlier reporting on August 15, 2026 carried his line that “Only idiot startup founders stay in Cali.” By August 17, he was calling the plan “insane” in television coverage.

Khanna offered a specific structural counter during the online exchange. Under his proposal, California would lend illiquid founders the tax payment, secured against their pledged shares, on a non-recourse basis over roughly ten years. At the end of the term, the founder repays in cash or the state takes the shares. Cuban’s response was pointed: if California ends up holding equity in private startups, the state becomes a venture investor, with all the governance complications that entails.

Two Different Proposals

The public debate has conflated two distinct measures. Proposition 40, the California ballot measure, would impose a one-time 5% tax on the wealth of roughly 200 state residents worth more than $1 billion, with 90% of proceeds directed to healthcare programs such as Medi-Cal and the remainder split between food assistance and education. SEIU-UHW, the healthcare workers union sponsoring the initiative, estimates it would generate around $100 billion. The measure was drafted by tax law professors at UC Berkeley, UC Davis, and the University of Missouri, and qualified for the ballot on June 17, 2026, with nearly 980,000 valid signatures.

Separately, Rep. Ro Khanna has joined Vermont Sen. Bernie Sanders in pushing federal legislation that would impose an annual 5% wealth tax on billionaires nationwide. The distinction matters for Cuban’s argument: a recurring yearly 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.”

He also pushed back on Cuban’s illiquidity emphasis, arguing that roughly 72% of California billionaire wealth sits in publicly traded stock and can be sold without difficulty. The founders Cuban was describing, Khanna said, represent a narrower category of “true paper billionaires with illiquid assets.”

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 remains unsettled, but pre-vote behavior is already offering some evidence. Reporting by Fortune and Money Talks News found that at least six high-profile billionaires, among them Google co-founders Sergey Brin and Larry Page along with investor Peter Thiel, had reduced their California ties or shifted their tax base ahead of the January 1, 2026 residency cutoff that the measure uses to determine liability. California can still contest whether those moves hold up legally, but the exits represent real-world movement rather than rhetoric.

The University of Missouri School of Law research team that helped draft the measure argues that relocation threats tend to be strategic posturing. SEIU-UHW chief of staff Suzanne Jimenez, one of the measure’s architects, 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 takes a more cautious view, 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 sector at stake is substantial: that ecosystem represents 21.7% of state GDP, according to Bureau of Economic Analysis data.

The Money War Around the November Vote

Spending on both sides has scaled quickly. SEIU-UHW and allied political groups have contributed more than $31 million to a committee supporting the initiative, per ABC News. On the other side, opposition group Building a Better California has become a nine-figure operation: Google co-founder Sergey Brin has personally poured $102 million into the group this year, according to California Secretary of State filings, making him the dominant force behind the opposition. The organization has raised more than $118 million from ten donors in total.

Building a Better California is backing two competing ballot initiatives, one on government transparency and one protecting retirement savings from taxes. Under California’s constitutional rules, if either competing measure receives more votes than Proposition 40, it would negate the wealth tax. Those two campaigns have received roughly $48 million and $49 million respectively since February, almost entirely from Building a Better California. As Syracuse University political scientist Shana Kushner Gadarian told 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, framed the stakes in broader economic terms, telling 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.” For her part, Jimenez warned of a “complete collapse” of California’s healthcare system if federal funding shortfalls go unaddressed. The California Budget and Policy Center estimates the state could lose as much as $30 billion in Medicaid funding annually from the H.R. 1 cuts, putting as many as 3.4 million people at risk of losing coverage.

What to Watch

The vote is set for November 3. Gov. Gavin Newsom opposes the tax, per ABC News reporting from June 2, 2026, a noteworthy split from a state party apparatus that has endorsed the measure. In a May 5 gubernatorial debate, every candidate except Tom Steyer voiced opposition to it. 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 vision to reach the opposite conclusion. Investors watching California’s tech ecosystem will get their answer at the ballot box.

Editor’s note: This article has been updated to reflect that Proposition 40 will appear on the November 3, 2026 ballot, that the measure targets roughly 200 billionaires (per SEIU-UHW’s own estimate) rather than 250, that Sergey Brin’s contributions to Building a Better California have reached $102 million per California Secretary of State filings, that Rep. Khanna offered a specific non-recourse loan counter-proposal for illiquid founders during the debate, and that at least six billionaires including Brin, Larry Page, and Peter Thiel had already reduced California ties ahead of the January 1, 2026 residency cutoff.

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