Y Combinator's Garry Tan Warns Ro Khanna's Policies Could 'Destroy California Startups,' Set Back US Innovation By Decade

Garry Tan, CEO of Y Combinator, the American technology startup accelerator and venture capital firm, in a fresh critique of California's billionaire tax, warned that the policies of Rep. Ro Khanna (D-Calif.)  could negatively impact the state's startup ecosystem.

Tan Criticizes Tax-Related Policy

Tan took to X to express his concerns about Khanna’s policies. He argued that these policies could potentially drive away a significant portion of the US stock market from California, a region that has long been a hub for innovation.

The Canadian-American venture capitalist wrote on X, “1/3 of the US stock market is in "his district,"but won't be in another 10 years because of Ro Khanna's support of asset seizure of post tax wealth and unrealized gains taxes that will kill startups.”

Startup Exodus Risk Highlighted

He specifically pointed out Khanna’s endorsement of “asset seizure of post-tax wealth and unrealized gains taxes,” which he feels could be harmful to California’s startup scene.

Tan proposed that a ten-year delay in American innovation could result from these policies.

Wealth Tax Draws Criticism

This warning comes in the wake of a series of concerns raised about the economic climate in California.

Tan previously criticized California's economic conditions, following a recommendation from venture capitalist and White House AI and crypto czar David Sacks that Y Combinator open an office in Austin to reduce its exposure to the state's growing fiscal and political pressures.

Khanna has been a vocal advocate for a billionaire tax, which would tax California residents with a net worth exceeding $1 billion at up to 5% of their assets. Those with at least $20 billion in assets as of Jan. 1 would face a one-time tax of $1 billion.

The policy has drawn criticism from some of California's wealthiest residents, including Palantir Technologies (NASDAQ:PLTR) co-founder Peter Thiel, who, along with others, has threatened to leave the state if the tax is enacted.

Photo Courtesy: Phil Pasquini on Shutterstock.com

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