Khanna's loan-for-shares tax plan draws Cuban 'insane' blast

Rep. Ro Khanna's plan advances the tax money to a founder whose fortune is tied up in illiquid shares, against a pledge of stock. The loan runs about 10 years, 'long but not infinite,' in Khanna's phrase, and is repaid in cash or with the government taking the shares. Mark Cuban called the idea 'insane' in a weekend exchange on X, pointing out that the state lends a founder money only to get it back as tax revenue, with no incremental receipts for the treasury. Bloomberg's dispatch, carried by WealthManagement.com, reports the terms.

The proposal is tied to a California ballot measure Khanna supports: a one-time 5% tax on billionaires' wealth, on the November ballot, pitched by a healthcare union. The fight has rattled the ultra-wealthy, split state politics, pushed some billionaires out of California, and put Khanna at odds with former wealthy backers. Governor Gavin Newsom and Xavier Becerra oppose the levy; the state Democratic Party has endorsed it. Palmer Luckey of Anduril and investor Bill Ackman also weighed in against the plan. Ripple co-founder Chris Larsen, a major Democratic donor, gave another $10 million to Building a Better California, a group organized to oppose the tax, per an Aug. 14 filing.

For family offices, the exchange turns tax politics into a balance-sheet question. A loan secured only by pledged shares, with the state as residual owner, behaves like a warrant on the family's operating company. Even if the ballot measure fails, the proposal prices concentrated private wealth by what the state would lend against the shares.