California Democratic Rep. Ro Khanna says he has a solution for Silicon Valley elites angry about the wealth tax: tackle fraud.
Khanna came under fire over the weekend from some donors and allies in the tech industry for supporting a wealth tax. California labor groups are pushing to put a statewide tax on billionaires on the November ballot, and some wealthy Californians are warning they will leave the state and support Khanna’s primary challenger in next year’s election if the bill passes.
Khanna, who represents Silicon Valley, said in an interview with CNBC that he would begin a bipartisan effort to root out corruption at the state level, starting with his post on the House Oversight and Government Reform Committee, to ensure new tax dollars are not wasted. This initiative will ensure that funds are channeled to healthcare and other essential services, he said.
“If you want to support Medicare for All and advocate for tax increases, as I do, you have to earn the trust of the people,” Khanna said. “People need to have receipts for what their money is being spent on. I can’t expect people to support the progressive ideals that I have when there’s corruption in the government and waste in the government.”
Khanna said he would find someone on the other side of the aisle to help with the issue, similar to his recent partnership with Rep. Thomas Massie (R-Ky.), who forced the release of files on notorious sex offender Jeffrey Epstein. Mr. Khanna said he would like to commission a report on state-level fraud from the nonpartisan Government Accountability Office and hold public hearings on the issue.
U.S. Representative Thomas Massie (R-Ky.) speaks at a press conference on the Epstein Files Transparency Act with Representative Marjorie Taylor Greene (R-Ga.) and Representative Ro Khanna (D-Calif.) before the House vote on releasing files related to the late convicted Jeffrey Epstein at the U.S. Capitol in Washington, DC, on November 18, 2025. November 18, 2025.
Annabelle Gordon Reuter
Khanna’s pitch comes after the California Comptroller released a new report identifying potential fraud in the state. Meanwhile, some of the alleged fraud cases in Minnesota led to the first indictments in 2022, and Republican lawmakers and the Trump administration are once again drawing national attention.
Many critics of Mr. Khanna’s support for a wealth tax point to these fraud cases as a reason why the tax doesn’t work.
Chamath Palihapitiya, a prominent tech investor and Trump supporter, said in a post on X: “After an audit and a zero-based budget, if there is a revenue gap, I will support a wealth tax.” “Until then, you and your ilk just have more incentive to fraud, manipulate votes, and steal.”
Mr Khanna said his new oversight efforts were in response to “feedback from constituents and leaders in my district” on the wealth tax.
He added that the investigation would not only focus on the fraud uncovered in California and Minnesota, and that finding a Republican partner would prevent the investigation from becoming partisan.
“It’s not a question of whether it’s a blue state or a red state,” Khanna said. “Obviously, there have been reports in Minnesota and California, but it goes beyond that. We need to look at state governments and not just problematize the blue states, but find out where this fraud is happening and what can be done about it.”
California and Minnesota are both ruled by Democratic governors. Minnesota Governor Tim Walz, a former Democratic vice presidential candidate, is seeking re-election in 2026. House Oversight Committee Chairman James Comer (R-Ky.) called on Minnesota officials to testify before the committee.
California’s proposed wealth tax, known as the Millionaires’ Tax Act of 2026, would impose a one-time 5% tax on the assets of the state’s billionaires to help cover an anticipated shortfall in the state’s health care budget. The Service Employees International Union and the United Health Care Workers Western Union are pushing for the measure.
The bill needs to gather enough signatures to qualify for a vote. California voters will then decide whether to introduce the new tax.
Technology company leaders opposed to the proposal worry that the tax would apply to unrealized gains, leaving founders of startups with more than $1 billion in net worth based on the paper value of privately held stocks stranded, even though their assets are illiquid.
Mr. Khanna acknowledged those concerns in an interview, saying he supports wealth taxes to pay for California and federal health care costs, but cautioned that “there are workarounds for equity that is restricted to illiquid founders running unprofitable companies.”
“It’s possible to do it in a way that doesn’t hurt paper billionaires in startups with restricted stock,” he said.
