On Thursday, Rep. Ro Khanna (D-Calif.) pushed back against warnings that proposed billionaire wealth tax could drive wealthy residents out of the state after Meta Platforms, Inc. (NASDAQ:META) (NASDAQ:META) struck a deal to keep CEO Mark Zuckerberg in California for eight years.
Ro Khanna Challenges Newsom, Sergey Brin Over Wealth Tax
Khanna took to X to argue that Zuckerberg’s arrangement undermines claims that billionaires would flee California if voters approve Proposition 40, a proposed one-time 5% tax on the state’s billionaires.
“Looks like billionaires will stay and figure out a way to pay the tax,” Khanna wrote, adding that the measure could fund health care for children from low-income families.
“Gavin, can you and Sergey Brin stop with your fear-mongering of a billionaire exodus?” he asked, referring to Gov. Gavin Newsom (D) and Sergey Brin, co-founder of Alphabet Inc.’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google.
How Meta’s Deal Could Help Zuckerberg Pay the Tax
According to a Wednesday filing, Meta plans to issue a new class of non-voting Class C shares to Zuckerberg in January 2027.
The arrangement would let him sell some shares to cover a potential multibillion-dollar tax bill without directly sacrificing his voting control of the company.
Zuckerberg, whose net worth is estimated at around $230 billion as per Bloomberg data, had reportedly considered moving his primary residence outside California over concerns about the proposed tax.
Under the agreement, he has committed to remaining a California resident, or living wherever Meta maintains its headquarters, for eight years.
The proposal remains uncertain, with political analysts questioning whether it will pass. California is home to as many as 250 billionaires with a combined fortune exceeding $2 trillion, Reuters reported.
Bernie Sanders Backs Tax As Critics Warn of Exodus
Khanna’s position aligns with Sen. Bernie Sanders (I-Vt.), who argued last month that the tax could preserve health coverage for 3 million residents. Sanders also accused billionaires of spending $229 million to oppose the measure.
However, economist Peter Schiff has warned that the tax could prompt wealthy entrepreneurs to leave California, potentially forcing asset sales and weakening the state’s tax base.
Newsom opposes California’s proposal while supporting a federal wealth tax approach.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo Courtesy: Phil Pasquini on Shutterstock
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