Democrat Rep. Ro Khanna Defends ‘Wealth Tax’ on California Billionaires: ‘You Didn’t Build This Money Yourself’

Self-described “progressive capitalist” Rep. Ro Khanna (D-CA) defended taxing California billionaires via Proposition 40 by saying, “You didn’t build this money yourself.” Khanna defended a “wealth tax” on California’s 200-plus billionaires during a Monday interview on a podcast called Conversate with Killer Mike. The line of questioning centered around a referendum going before California voters this election cycle called Proposition 40, which, if passed, would levy a one-time, 5 percent tax on billionaires. The measure would be the first tax in the nation on the assets of the extremely wealthy and would supposedly be funneled toward the state’s healthcare system. The measure has garnered a massive amount of pushback, even from many Democrats, including California Gov. Gavin Newsom, who warn the measure could backfire and drive wealth from the state. Two other referendums, Proposition 41 and Proposition 42, will also be on the ballot and would cancel out Proposition 40 if they receive more votes. Proposition 41 would require audits of new tax programs, and Proposition 42 would ban new state personal property taxes and certain retroactive state taxes. Podcast host and rapper Killer Mike asked Khanna, an Indian American, how he responds to concerns about more taxes from people who are culturally similar to him and are now some of the highest earners in the U.S. “If you’re representing the highest earners in terms of culturally, what do you say to people who say, ‘Well, now that we finally got a chance to be earners, why do you want to tax us now?…For people who are aspirational billionaires, they’re going to say, ‘Why do we want to be taxed 5 percent with Prop. 40?’… The 5 percent tax that only about 200 people will be affected by — what is it about it that has the public so afraid or scared?” the host asked. “Well, the public isn’t afraid. The billionaires are afraid,” Khanna replied, before claiming that “these billionaires aren’t paying taxes.” “You make a lot of money, if you do, for a record, or someone makes a lot of money as a lawyer or as an investment banker, and they pay tax — they pay 40 percent, 50 percent, 60 percent tax. And we could argue whether they’re paying too little, too much, and that’s the argument usually you have in Congress,” Khanna said. “[But] this is a whole new form of wealth generation. These are people who get valuations at $32, $33, $40 billion dollar companies, right? And you’ve got $25 trillion of wealth in my district, $25 trillion, one-third of the nation’s wealth is in my district, in my district and the 50 miles surrounding. And you’ve got 989 billionaires in America, and they’re producing all this wealth, and they’re not paying tax — not because they’re doing anything illegal, [but] because they’re simply sitting on these companies, the companies are growing, and their entire wealth is through the asset appreciation of these companies.” “It’s not through a W2 form. They have no income. And so, what we’re saying is, look, there’s all this new wealth that’s being generated, and there isn’t a way to tax it,” he continued. “So, if you tax it 5 percent, we will actually see more people in society benefit from this wealth explosion because you didn’t build this money yourself. I mean, yeah, you were entrepreneurial, you had some genius, you worked hard, but we also had the government basically fund the Internet. We had government fund AI research. We had government fund universities. So why not pay 5 percent? By the way, your wealth has increased 144 percent over the last three years.” Khanna added that Democrats like Newsom — who is believed to have 2028 presidential ambitions — “don’t want to offend these billionaires because they want their money for running for office.” He said while many of his colleagues may secretly back taxing billionaires, they believe they need the favor of their exorbitantly wealthy donors to compete with Republicans. “And so, it’s really about the Democratic Party. Are we going to be the party of Bernie Sanders and the New Deal, or are we going to still be the corporate Democratic Party?” he said. “That’s what’s going on. This is why this fight matters so much in California.” Khanna, along with democratic socialist Sen. Bernie Sanders (I-VT) is the architect of separate federal legislation that would tax billionaires 5 percent annually nationwide, called the “Make Billionaires Pay Their Fair Share Act.” Katherine Hamilton is a political reporter for Breitbart News. You can follow her on X @thekat_hamilton.