Mark Cuban has escalated his criticism of California's proposed one-time 5% billionaire tax, arguing in a public exchange with Rep. Ro Khanna that Proposition 40 would hit founders whose wealth is tied up in private company shares and could drive startups and investors out of the state. Khanna, who has promoted the measure alongside Bernie Sanders, said the California Democratic Party and the California labor movement support the proposal and argued it is needed to protect healthcare funding for millions of working-class and middle-class Californians. Cuban countered that many entrepreneurs become billionaires on paper after fundraising rounds without having cash to pay a tax on unrealized wealth, warning that he would avoid investing in California startups if the measure passes unless they relocate. Khanna suggested founders with illiquid holdings could pledge shares to the state and receive a non-recourse government loan to pay the tax, with repayment later made in cash or through the transfer of shares. Cuban rejected that idea as unworkable and said it could leave the state holding stakes in private companies. The exchange adds to a broader fight over Proposition 40 ahead of the November ballot, where a UC Berkeley Institute of Governmental Studies poll found 48% support, 41% opposition and 11% undecided. The survey also showed unusually high awareness for this stage of the campaign, with 72% of voters saying they had heard about the initiative. Supporters say the tax would raise about $100 billion over five years, with 90% directed to healthcare, while critics argue even a one-time levy could distort investment decisions, encourage wealthy residents to leave and weaken an economy heavily tied to technology and professional services. California's Legislative Analyst's Office has said billionaire wealth often consists of stocks, businesses and other investments rather than cash, making a wealth tax structurally different from an income tax, and it expects the measure to generate tens of billions of dollars over several years.