Mark Cuban warns California’s punitive billionaire tax will drive investment and jobs away
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Billionaire investor Mark Cuban has cautioned that a proposed one-time wealth tax targeting Californians with net worth over $1 billion could force investors and startup founders to flee the state. As lawmakers debate the measure, critics argue it will stifle innovation and damage California’s economy.
California voters are set to decide in November whether to adopt a radical ballot initiative that would slap a one-time 5% tax on residents whose net worth exceeds $1 billion. Pushed by the Service Employees International Union, the proposal is yet another attempt to squeeze more revenue from the state’s most successful residents, under the guise of funding health-care and education programs. The tax would even apply retroactively to individuals who were residents as of Jan. 1, 2026, raising serious concerns about fairness and government overreach.
Recent Internal Revenue Service data highlight the consequences of California’s high-tax policies: a net outflow of high-income taxpayers. Los Angeles County alone lost 17,496 filers, taking $1.9 billion in income elsewhere, while Orange, San Diego, Riverside, and San Bernardino counties also suffered significant departures. These numbers underscore the risk that more punitive taxes will only accelerate the exodus of wealth and opportunity from the state.
During a public exchange with Democratic Rep. Ro Khanna, who defended the tax, billionaire entrepreneur Mark Cuban sounded the alarm that the measure could have devastating effects on where investors put their money and where startups choose to operate. “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,” Cuban wrote.
Cuban also pointed out that the tax could force startup founders to reconsider their location, suggesting only those unwilling to relocate would remain. The debate highlights the real danger that ever-higher taxes will drive away the very people who create jobs and fuel innovation, while supporters cling to the fantasy that punishing success will somehow benefit public services.