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Mark Cuban tells Rep. Ro Khanna he doesn’t grasp startup business

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Mark Cuban tells Rep. Ro Khanna he doesn't grasp startup business

Mark Cuban told Rep. Ro Khanna, D-Calif., that he “doesn’t understand business” during a heated clash over California’s proposed 5% billionaire wealth tax, warning it could drive startup founders and investors out of the state.

The exchange centered on California’s Proposition 40, a controversial ballot measure that would impose a one-time 5% wealth tax on residents with more than $1 billion in assets.

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The measure has been endorsed by the California Democratic Party, while some notable leaders, including Gov. Gavin Newsom, have expressed opposition.

In a video posted on X on Saturday, Khanna made the case for the tax, arguing that it would help preserve health care for working-class Californians. He said the “Sacramento establishment” and lobbyists opposing the measure were “blatantly out of touch.”

STEVE HILTON WARNS CALIFORNIA ECONOMY WILL ‘ABSOLUTELY COLLAPSE’ UNDER ‘INSANE’ BILLIONAIRE TAX

Mark Cuban, left, and Rep. Ro Khanna, D-Calif., clashed on social media over California's proposed 5% wealth tax on billionaires.

Mark Cuban, left, and Rep. Ro Khanna, D-Calif., clashed on social media over California’s proposed 5% wealth tax on billionaires. (Leah Millis/Reuters; Nathan Laine/Bloomberg via Getty Images / Getty Images)

Cuban responded by arguing that founders of rapidly appreciating startups can become billionaires on paper without having hundreds of millions of dollars in liquid assets available to pay the proposed tax.

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“They are the definition of cash poor, stock rich,” Cuban wrote on X.

He warned that the measure could cause startup founders and investors to leave California.

“If this passes, only idiot startup founders stay in Cali,” Cuban wrote.

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Mark Cuban on artificial intelligence

Billionaire investor Mark Cuban warned that California’s proposed 5% wealth tax could drive startup founders and investors out of the state. (Christian Petersen/Getty Images / Getty Images)

Cuban went further, warning that the measure could also influence where he invests.

“I will make NOT being in California a pre requisite for an investment,” he continued.

“Ideology is not a strategy Ro,” he added.

Khanna then proposed a workaround for founders whose wealth is largely tied up in private-company stock.

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“Why not a non recourse loan for pledged stock as collateral for this situation?” Khanna wrote.

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Rep. Ro Khanna (D-CA)

Rep. Ro Khanna, D-Calif., defended a proposed one-time 5% wealth tax on California residents with more than $1 billion in assets. (Win McNamee / Getty Images)

Khanna proposed addressing the concerns surrounding illiquid founders by allowing them to pledge shares in their companies as collateral for a government loan that could then be used to pay the wealth tax.

The loan could remain outstanding for roughly 10 years, after which the founder would either repay the government in cash or the government would take possession of the pledged shares. Because the loan would be nonrecourse, the founder would not be personally liable if the company failed.

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Cuban blasted the proposal.

“Ro, that’s insane,” he wrote.

Cuban argued that California would effectively lend founders money that would immediately be returned to the state as payment of the tax, meaning the arrangement would initially generate no additional cash revenue from those taxpayers.

“What’s the point of that?” he wrote.

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California Governor Gavin Newsom gives speech

California Gov. Gavin Newsom has expressed opposition to the proposed one-time wealth tax on the state’s billionaires. (Brandon Bell/Getty Images / Getty Images)

Cuban also argued that California could eventually wind up owning shares in private companies if founders were unable to repay the loans.

“Cali, You make it. We take it!” Cuban wrote.

Khanna pushed back on Cuban’s criticism, arguing that the government would still collect the tax from billionaires with liquid assets.

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“The government would still collect from the vast majority of billionaires who are not illiquid,” Khanna wrote.

Khanna claimed that 72% of billionaire wealth is held in public stock and said the proposed financing mechanism would be aimed at true “paper billionaires” whose fortunes are tied to illiquid assets. He argued that if a private company succeeds, California would ultimately collect on the loan, while founders would not be personally liable if the company failed.

CALIFORNIA VOTERS TO CONSIDER BALLOT MEASURE TO INCREASE TAXES ON BILLIONAIRES

mark cuban

Mark Cuban warned that if California’s proposed billionaire wealth tax passes, he would make not being based in the state a prerequisite for certain startup investments. (Tim Heitman/Getty Images / Getty Images)

Khanna then broadened his argument, telling Cuban that ordinary Americans support higher taxes on billionaires.

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“Mark, come on a road trip with me around California, Pennsylvania and the country and ask ordinary Americans how they feel about a billionaire tax,” Khanna wrote. “Most say, I promise you, why only 5 percent?”

Cuban shot back: “You don’t understand business Ro.”

He argued that even a successful founder could spend 10 years growing a company, create thousands of jobs and pay hundreds of millions of dollars in federal and state taxes without ever having $250 million in liquid assets available to repay the proposed state loan.

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CA Democrat Rep Ro Khanna speaks in his office at the Cannon Building Office

Rep. Ro Khanna, D-Calif., argued that California’s proposed billionaire tax would help protect health care for working-class and middle-class residents. (Tom Williams/CQ-Roll Call, Inc via Getty Images / Getty Images)

“Is that what you want your state to be?” Cuban wrote.

“Next tweet we can discuss who the money is going to with Prop 40,” he added.

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(VIDEO) Trump Approves Emergency Declaration As Historic Indiana Flooding Kills At Least Five People

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US presidential candidate Donald Trump has long been critical of the billions of dollars in US support for Ukraine

INDIANAPOLIS — President Donald Trump approved a federal emergency declaration for Indiana on Saturday as historic flooding tied to the White River killed at least five people, forced hundreds of evacuations across the Indianapolis area, and pushed river levels to heights not seen in more than a century.

FEMA announced just before 8:30 p.m. Saturday that federal disaster assistance would be available to Indiana following Trump’s approval, a move Gov. Mike Braun had formally requested a day earlier. The declaration allows the Federal Emergency Management Agency to cover 75% of eligible emergency response costs, including rescue operations and emergency sheltering, across 53 Indiana counties, though it stops short of a full disaster declaration.

Braun said he spoke with Trump shortly before announcing the news at a press conference. “I spoke with President Trump today about the severe storms and historic flooding impacting Indiana,” Braun said, crediting the coordinated push from state officeholders and members of Congress with helping expedite a process that typically takes four to five days.

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The flooding stemmed from days of heavy rainfall, compounded by a likely derecho that struck the state August 11. The National Weather Service reported more than 11 inches of rain fell over a two-day period in parts of central Indiana, sending the White River to record levels as the water moved downstream toward Indianapolis. In Noblesville, the river crested overnight at 24.6 feet, surpassing a previous record of 23.8 feet set in March 1913. Indianapolis Mayor Joe Hogsett described the flooding as the city’s worst in more than 30 years.

Indiana Department of Homeland Security executive director Jonathan Whitham said the scale of the event ranked among the most severe the state has faced in recent memory. “This is a historic event for Indiana,” Whitham said, adding that he expects tens of millions of dollars in property and infrastructure damage, calling the estimate a conservative “low ballpark” figure.

At least five deaths have been confirmed by state officials as tied to the storms and flooding, though authorities said they continue investigating whether additional deaths may be connected to the storm system. Among those who died was Matthew Morey, a 19-year-old Delta High School graduate headed to Purdue University, whose body was recovered from the Mississinewa River in Delaware County three days after he and three friends jumped off a bridge into the water. Jeff Stanley, chief deputy of the Delaware County Sheriff’s Department, addressed the loss directly. “Our hearts are with Matthew’s family, friends, classmates, and everyone who knew and loved him,” Stanley said, adding that investigators had committed to searching until his family had answers.

A second Delaware County resident, 59-year-old Stephanie Sallee, was also found dead after officials said her car was swept away by floodwaters while she was driving through a rain-swollen area.

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In Indianapolis, the White River’s rise triggered evacuations across several neighborhoods, including Rocky Ripple, Ravenswood and Broad Ripple. City officials said roughly 400 people had been evacuated from Ravenswood alone, in addition to those evacuated from Broad Ripple the previous night, while emergency crews conducted dozens of water rescues using boats. The Department of Public Works closed floodgates overnight around the Indianapolis Arts Center, the Edgewater Apartments, and other properties along the river’s south bank, and later moved to close the 53rd Street bridge in Rocky Ripple, prompting the town to post an urgent warning telling residents it was their “last way out.”

Public Works Director Todd Wilson urged continued caution even as officials tracked the river’s crest. “The water is still rising and will be rising all day long,” Wilson said. “Heed the warnings.”

In Carmel, north of Indianapolis, roughly 40 residents were evacuated, including residents of the Bickford of Carmel assisted living facility, who were relocated to other care facilities and a local church. Sinkholes also forced the closure of a stretch of Hazel Dell Parkway in Carmel after the ground gave way near Blue Woods Creek.

Beyond the immediate flooding response, authorities in Wayne County warned residents to remain alert for scammers posing as FEMA representatives going door to door. Indiana Attorney General Todd Rokita urged residents to verify credentials of anyone claiming to offer flood relief, avoid wire transfers, and insist on written agreements, noting that FEMA never charges application fees.

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Braun pointed to the state’s $1.14 billion rainy day fund as a key resource supporting Indiana’s response, while acknowledging that increasingly extreme weather could reshape how the state approaches disaster preparedness going forward, drawing a comparison to hurricane-prone Florida’s approach to insurance and readiness. Indiana has recorded 81 confirmed tornadoes so far in 2026, and Whitham said the scale of this summer’s flood damage could rival or exceed costs from the state’s last major flooding event, in June 2008.

With water levels beginning to recede in some areas Saturday evening even as new rain moved through parts of northern Indiana, officials cautioned that the danger was not yet over, warning that flash flooding remained possible in low-lying areas even after the White River’s crest had passed.

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German investment in the U.S. drops to three-year low amid policy uncertainty

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National CineMedia Diversifies Away From Cinema With Transformative Acquisition

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National CineMedia Diversifies Away From Cinema With Transformative Acquisition

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I am a self-educated deep value investor. I mostly focus on US small caps as I believe most of the value opportunities can be found there in the current market. I love to look at beaten-down or underfollowed stocks searching for mean reversion opportunities. I look for classic deep value situations based on undervalued assets, in line with the classic net net investing of Benjamin Graham or the deep book value discounts of Walter Schloss. I also like Mohnish Pabrai’s out-of-the box thinking regarding cheap assets. I am also looking for companies facing temporary problems that are executing successful turnarounds. I am a big believer of the counterintuitive thesis that some of the best investment returns can be achieved not by popular high-fliers, but when a company’s situation improves from “really bad” to “average”. I started investing in the years leading up to the pandemic, so I have experienced both mild bear markets and raging bull markets during my investing journey. Unsurprisingly, I tend to find more opportunities in down markets.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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9 penny stocks surge up to 325% in 2026 so far; 3 turn multibaggers. Did you own any?

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Equitable Holdings director Charles Stonehill sells $386k in shares

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Xunlei Limited: What Needs To Happen If The Stock Is To Get Going (NASDAQ:XNET)

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Welcome to my author’s site. As an avid follower of SeekingAlpha, I take great interest in articles posted as the subject matter is often something that appeals to me. However, I will sometimes encounter an article that I might not agree with. My purpose is to present an alternative view to readers that they may want to take into account. I hope you find my articles interesting and informative.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of XNET either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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