FROM A WIDE-OPEN GOVERNOR’S RACE to a bitter congressional contest, Santa Clara County has emerged as a key battleground in the tech industry’s bid to control California politics — and shield billionaires from a wealth tax.
Two electoral fights have shaped the “Valley of Heart’s Delight” into combative territory. In the 17th Congressional District, incumbent Rep. Ro Khanna is facing a challenge from tech founder Ethan Agarwal, a fellow Democrat. Agarwal is an opponent of the ballot initiative to levy a one-time, 5% wealth tax on Californians with more than $1 billion in assets. He announced his bid after Khanna became one of the proposed tax’s loudest champions. That opposition has partly colored Agarwal’s campaign — backed by Silicon Valley tech elites such as YCombinator CEO Garry Tan — as he frequently blasts Khanna’s support for the tax online, as well as Khanna’s family ties to stock trading.
San Jose Mayor Matt Mahan’s campaign for California governor has also blasted the billionaire tax initiative, which needs 875,000 valid signatures by June 24 to qualify for the November ballot. Like Agarwal, Mahan has the tech elites’ political brass ring — with millions of dollars in fundraising support from figures such as Tan and Palantir co-founder Joe Lonsdale.
Mahan’s been hard to ignore despite low polling numbers and a lingering struggle for recognition. A canceled USC debate included him while snubbing other candidates with similarly low polling. He’s received steady coverage in Politico and appeared on “The Daily Show” with Jon Stewart.
“It’s an interesting moment and these two races are the intersection of the same phenomenon — that there are many faces to our county,” Santa Clara County Democratic Party Chair Bill James told San José Spotlight. “Santa Clara County is an overwhelmingly liberal, progressive philosophical area with tech industries and a small group of billionaires with a lot of money.”
Pouring into PACs
In the backdrop, tech donors are pumping millions of dollars into political action committees set up to support allies in office statewide, such as Grow California — launched with a $5 million infusion from Ripple CEO Chris Larsen.
The California Business Roundtable, an independent committee set up to oppose the billionaire tax, received $3 million from conservative benefactor and Palantir co-founder Peter Thiel, as well as a $1 million infusion from former Google CEO Eric Schmidt, according to state filings. Another anti-billionaire tax committee, Building a Better California, has also seen millions of dollars in donations from executives at Doordash and Stripe.
Some billionaires have publicly indicated plans to leave the state over the initiative, including Google co-founder Sergey Brin, who is playing both sides in the governor’s race by donating to Mahan, a Democrat, and conservative pundit Steve Hilton, a Republican.
Silicon Valley’s tech elite are also supporting Mahan through donations to his campaign and independent spending committees, which paid to highlight the San Jose mayor in a Super Bowl ad.
Mahan and representatives for his campaign did not respond to requests for comment.
Agarwal said he doesn’t see the Congressional District 17 contest as a reflection of the tech battle.
“This race is about representing the people of the 17th District,” Agarwal told San José Spotlight. “There’s 5,000 children in the district living in poverty. I’ve never heard Ro mention that once. I’m focused on those children. I’m focused on providing jobs for the district, infrastructure. I’m trying to make sure that people in that district have lives and jobs that they can live comfortably in.”
Agarwal said a state ballot measure should be of no concern to Khanna as a federal lawmaker.
“He’s a congressman. He has no impact over a state ballot measure regarding the wealth tax,” Agarwal said. “And neither would I as a congressman.”
State ballot measures still impact the well-being of people within Khanna’s federal boundaries, the incumbent lawmaker said. State legislative analysts say 90% of the revenue from the billionaire tax, if passed, would go toward paying for health care services for the public.
“I’m trying to make sure people have affordable health care and child care,” Khanna told San José Spotlight.
He disagrees that the race has nothing to do with the issue.
“We need a new tech social contract,” he said. “It’s fine to have economic growth and economic innovation celebrated, but this race is about making sure our politics are not dictated by billionaires from outside the district — to make sure our elected officials are focused on our communities and not on outside powerful interests.”
Not just about the wealth tax
While Agarwal’s a Democrat, the boss of his local party doesn’t see his candidacy as serious.
“I think it’s more about funding a candidate who will run against and say bad things about Ro Khanna as a way of punishing him for taking this more economic populist position in general, not just about the wealth tax,” James said.
Mahan is another story, James added.
“You have people who are centrist and conservative looking for a candidate to have a more conservative approach to the state,” James said. “Yet our past few governors have been fairly moderate in their positions and spending.”
Mahan isn’t shy about criticizing Gov. Gavin Newsom’s leadership. Yet they are aligned against the proposed billionaire tax.
“Some folks may not like that Jerry Brown and Gavin Newsom were moderate, but most Californians do, which is why they were elected and elected again,” James said. “I don’t think we’re this crazy leftist utopia that billionaires have to be afraid of by a long shot. We’re a complex and big state with big opportunities and big needs.”
“I don’t think we’re this crazy leftist utopia that billionaires have to be afraid of by a long shot. We’re a complex and big state with big opportunities and big needs.”
Bill James, Santa Clara County Democratic Party Chair
While Mahan is a moderate Democrat, several liberal lawmakers in his own backyard have dismissed him as a vessel for the tech-driven deregulation and privatization of California.
But you won’t find Khanna in that crowd. In fact the lawmaker — balancing dual reputations as a progressive and friendly tech face — often sings the mayor’s praises, even if Mahan has challenged Khanna over the billionaire tax online.
“As a mayor he’s done a good job on issues of public safety and we’ve had a good working relationship to bring back resources to San Jose,” Khanna said. “I’ve always had an effective partnership with him as I did with the previous San Jose mayor, Sam Liccardo, who we now share an office with.”
Contact Brandon Pho at brandon@sanjosespotlight.com or @brandonphooo on X.
This story originally appeared in San Jose Spotlight.