Mark Cuban cautions that California billionaire tax may deter investment
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Billionaire investor Mark Cuban warned that a proposed one-time wealth tax on Californians with net worth over $1 billion could push investors and startup founders out of the state, as lawmakers debate the measure.
California voters will decide in November whether to adopt a ballot initiative that would levy a one-time 5% tax on residents whose net worth exceeds $1 billion. The proposal, supported by the Service Employees International Union, is intended to raise revenue for health-care and education programs and would apply retroactively to individuals who were residents as of Jan. 1, 2026.
Recent Internal Revenue Service data show a net outflow of high-income taxpayers from the state. Los Angeles County lost 17,496 filers who took about $1.9 billion in income elsewhere, while Orange, San Diego, Riverside and San Bernardino counties also recorded sizable departures.
During a public exchange with Democratic Rep. Ro Khanna, who defended the tax, billionaire entrepreneur Mark Cuban said the measure could affect where investors allocate capital and where startups locate their operations. > "If this passes, and it doesn't directly impact me at all, I won't be a Cali resident, but you can bet if I'm investing in a multi-billion-dollar startup, I'm asking them to move from California first," he wrote.
Cuban added that the tax might influence the decisions of startup founders, suggesting that only those unwilling to relocate would remain in the state. The debate highlights concerns that higher taxes could deter wealth and investment, while supporters argue the revenue would fund critical public services.