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Vinod Khosla isn\u2019t packing his bags. As a wave of Silicon Valley billionaires quietly (or even loudly) sever ties with California over a proposed wealth tax that could levy a one-time 5% charge on assets held by residents worth $1 billion or more, the legendary venture capitalist and Sun Microsystems co-founder says he\u2019s staying put\u2014even as he sounds the alarm about what he calls permanent damage to the state\u2019s tax base.<\/p>\n
\u201cCalifornia will lose its most important taxpayers and net off much worse,\u201d Khosla wrote on X in late December, responding to Rep. Ro Khanna\u2019s vocal support for the measure. And in a warning that goes beyond the billionaire class, Khosla added that \u201ceven people who don\u2019t expect this initiative to pass are still planning to leave because there will be another one.\u201d<\/p>\n
It\u2019s a striking posture for one of the Valley\u2019s most prominent voices: a man willing to criticize the policy loudly while refusing to flee it. As he told Fortune<\/em> Editor-in-Chief Alyson Shontell in a recent interview on the Fortune 500 Titans and Disruptors of Industry<\/em> podcast, he has \u201cno plans to leave California.\u201d<\/p>\n He argued that the state is playing a dangerous game. \u201cYou\u2019re permanently reducing the tax base on an ongoing basis to get a one shot,\u201d he said. \u201cThat\u2019s what a junkie does, a one-time shot. I don\u2019t care about the next 20 years of capital that will be taxes.\u201d <\/p>\n Khosla said one estimate he saw stated a lot of the state\u2019s wealthiest residents have already left. \u201cAnnual income from California, from that trillion that is left, is gone if this tax passes.\u201d He did offer a suggestion of something that would tackle the state\u2019s issues better.<\/p>\n For Khosla, a billionaire and co-founder of Sun Microsystems who made his fortune in Silicon Valley, the question isn\u2019t just theoretical. At 71, he remains deeply invested in California\u2019s future\u2014literally and figuratively.<\/p>\n \u201cI can\u2019t be fired. I\u2019ve never worried about a career. I don\u2019t need more money,\u201d he said. \u201cI sort of have this freedom to do what I want.\u201d And, as a proud Californian and American, he added that he thinks it\u2019s important for people to speak up. \u201cI have the luxury, so I definitely owe it to a country that\u2019s been really good to me.\u201d<\/p>\n The proposed Billionaire Tax Act\u2014backed by the Service Employees International Union-United Healthcare Workers West and approved for signature collection by the California Secretary of State in December 2025\u2014would require Californians worth over $1 billion to pay a one-time 5% tax on their total assets, with the option to spread payments over five years. Supporters say it could generate $100 billion to offset expected federal cuts to healthcare spending. <\/p>\n While the proposal is politically popular, Khosla told Shontell it \u201cdoesn\u2019t structurally solve the problem beyond the one-time shot of income \u2026 It\u2019s silly.\u201d He acknowledged that the state\u2019s social safety net, especially in health care, education, and food assistance, needs more funding, but he has been one of the loudest critics of the tax, calling Khanna\u2019s support for it \u201ccommie\u201d on X and accusing the congressman of acting out of personal political ambition rather than sound economic reasoning.<\/p>\n \u201cSo many entrepreneurs who own 20% of their company are talking about leaving now in case somebody takes another shot,\u201d Khosla told Shontell, \u201cbecause junkies come back and take another shot.\u201d<\/p>\n Indeed, the measure has already triggered an exodus, even before a single signature has been certified for the November 2026 ballot. Google co-founders Larry Page and Sergey Brin have taken steps to sever ties with the state. Chamath Palihapitiya estimated that more than $1 trillion in billionaire wealth has already left California amid the fight. Gov. Gavin Newsom\u2014himself a Democrat\u2014has said the measure \u201cmakes no sense\u201d and vowed to do \u201cwhatever it takes\u201d to kill it.<\/p>\n Rather than a wealth levy, Khosla advocates for systemic federal reform that would fundamentally reshape how America taxes the rich\u2014without driving them away.<\/p>\n \u201cIf, at the federal level, we doubled capital gains tax or made it all uniform one tax, then we will equalize and balance between economic profitability and economic growth and investment,\u201d he explained, referring to an infamous loophole that has existed in the tax code since almost the invention of the income tax itself, in the early 20th century. His specific proposal: eliminate preferential treatment for capital gains entirely, taxing all income\u2014whether from work or investments\u2014at the same rate.<\/p>\n The twist? Use the revenue windfall to exempt most Americans from taxation altogether.<\/p>\n \u201cThe next presidential campaign, I hope, gets behind nobody pays income tax below $100,000 a year starting 2030,\u201d Khosla said. \u201cThat shortfall is made up by increase in the capital gains tax to be the same as ordinary income\u2026 It makes it tax neutral, no more taxes, but much fairer distribution of income.\u201d<\/p>\n This math would work in favor of working Americans, Khosla argued: \u201cForty percent of all capital gains is paid by people making more than $10 million a year,\u201d he noted. \u201cThere\u2019s 123 million people, roughly, that make less than $100,000 a year, and you make all taxes go away for them.\u201d<\/p>\n His message to voters: \u201cThey will vote for a candidate who says no taxes if you make less than $100,000.\u201d He admitted it was \u201cjust one idea\u201d but it would at least be a structural change that would make sense. He added that he\u2019d be surprised if some kind of structural change doesn\u2019t happen before 2040.<\/p>\n Khosla\u2019s proposal directly targets the \u201cbuy, borrow, die\u201d strategy that allows ultrawealthy Americans to live off borrowed money secured by appreciating assets\u2014never triggering income or capital gains taxes. When they die, their heirs inherit with a stepped-up cost basis, erasing decades of embedded gains.<\/p>\n Tech investor Dave Friedberg, co-host of the\u00a0All-In<\/em>\u00a0podcast, offered a similar diagnosis: \u201cThere\u2019s a simple way to address it, which is to charge them a capital gains tax if they borrow against their assets that they haven\u2019t paid capital gains tax on,\u201d he said during a recent episode. \u201cVery simple. That can resolve this.\u201d<\/p>\n Khosla framed the issue in broader economic terms: In an AI-driven future where labor becomes increasingly automated the traditional balance between labor and capital income will tilt dramatically toward capital.<\/p>\n \u201cIn this traditional battle of share of income to labor versus capital, it\u2019ll shift a lot to capital, little to labor. How do you change that?\u201d he asked. \u201cWhy should we favor people with capital, even though it increases economic growth in a world where growth isn\u2019t in short supply? Capitalism was about efficiency, economic efficiency, but if the need for efficiency goes away because of extreme abundance, then why focus on efficiency? Let\u2019s focus on equity.\u201d<\/p>\n But his vision for structural tax reform extends well beyond state borders. \u201cThe current MAGA notion of \u2018lower the taxes\u2019 will not work,\u201d Khosla warned, arguing that government policy will determine whether AI-driven abundance creates a utopia or a dystopia.<\/p>\n \u201cPolicy, which will be driven by politics, will drive where we end up,\u201d he said. \u201cI think it will start in the early 2030s\u2014this massive drive for structural change.\u201d<\/p>\n The irony remains sharp: California\u2019s wealth tax may raise money once, but as long as billionaires can borrow against assets tax-free, the underlying architecture of wealth preservation remains intact. Khosla\u2019s staying put\u2014and betting the real battle will be fought in Washington, not Sacramento.<\/p>\n<\/div>\n #Silicon #Valley #legend #Vinod #Khosla #plans #leave #California #billionaire #tax #uproarbut #idea #fix #wealth #loophole<\/p>\n","protected":false},"excerpt":{"rendered":" Vinod Khosla isn\u2019t packing his… <\/p>\n","protected":false},"author":1,"featured_media":26703,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[2375,662,1349,863,10045,15055,215,10133,15191,548,4314,227,15190,6457,15054,81,3170],"_links":{"self":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/26702"}],"collection":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=26702"}],"version-history":[{"count":0,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/26702\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/media\/26703"}],"wp:attachment":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=26702"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=26702"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=26702"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}A tax that\u2019s rattling California\u2019s billionaires class<\/h2>\n
Going after \u2018buy, borrow, die\u2019<\/h2>\n