The battle over a proposed wealth tax has triggered what may very well be the primary aggressive race in a decade for a Silicon Valley congressional district, as a coalition of tech leaders has anointed a challenger to unseat Democratic Rep. Ro Khanna.
Ethan Agarwal is a newcomer to politics and a fellow Democrat who briefly mounted a marketing campaign for governor final yr. A former supporter of the congressman, the 40-year-old tech entrepreneur argues that he’s misplaced contact with the wants of the district.
Khanna’s support of a one-time tax on California’s billionaires was the “straw that broke the camel’s back,” in accordance with Sonoma State University Political Science Professor David McCuan, propelling Agarwal to leap into the race final month.
Khanna, 49, has but to face a critical challenger since ousting former Democratic Rep. Mike Honda in 2016 — his second try to take action. Since then, he’s handily gained every of his reelection bids with 67% to 75% of the vote. If Agarwal’s tech backers — like Y Combinator CEO Garry Tan and angel investor Ron Conway — pour cash into his efforts, Khanna may face his largest contest but.
“It is really difficult to defeat an incumbent,” McCuan stated. “But you see individuals who are well-heeled, backed by a number of venture capital dollars combined with Big Tech dollars, you see those candidates running throughout the country and especially in Northern California.”
The problem in opposition to Khanna is uncommon: Incumbent Reps. Sam Liccardo, Zoe Lofgren, Kevin Mullin and Jimmy Panetta in neighboring districts aren’t dealing with well-resourced opponents from throughout the Democratic social gathering.
When Khanna first launched onto the political scene greater than a decade in the past, the donors who rallied round him learn like a who’s who of Silicon Valley’s booming tech business — deep-pocketed buyers and executives eager on the younger lawyer’s imaginative and prescient of harnessing the Valley’s innovation. But McCuan stated that relationship has “matured and changed” as he’s sought to raise his nationwide profile on the progressive left.
At the identical time, the tech business has employed an “all-hands-on-deck” strategy in recent times, transitioning from taking part in protection to getting out forward of laws and insurance policies, McCuan stated.
The relationship that helped Khanna unseat a beloved eight-term incumbent in 2016 confirmed indicators that it might need soured final December as the congressman waded into California’s politically-charged wealth tax debate.
“I will miss them very much,” Khanna wrote in a sarcastic social media quip in response to information that the tax was driving Google cofounder Larry Page and enterprise capitalist Peter Thiel out of the state.
His support prompted on-line backlash from blue-check-marked posters on X who listed themselves as CEOs, founders or buyers of their bios — lots of whom at the moment are rallying round Agarwal.
The entrepreneur doesn’t essentially reject the premise of taxing the rich, however argues there are higher methods to go about it, such as growing the capital features tax or upping property taxes for funding properties.
The tax, which might impose a one-time 5% tax on the web value of billionaires within the state, has triggered an onslaught of spending and counterproposals by a group of Bay Area billionaires to stop it. The proposed tax, backed by a well being care union, has but to qualify for the November poll. It’s drawn opposition from others outdoors the tech business, together with Gov. Gavin Newsom, who has argued that it’ll damage the state’s financial system.
The seventeenth congressional district is uniquely positioned to be a type of battleground for a debate over whether or not the state’s most prosperous residents ought to pay extra in taxes. The district, which spans components of Alameda and Santa Clara counties, is the wealthiest congressional district within the nation, in accordance with U.S. Census knowledge. It’s residence to among the world’s richest firms, together with NVIDIA, Apple and Intel, and boasts a median annual family earnings of upwards of $181,000. But there’s additionally huge wealth inequality — greater than 6% of residents, lots of them kids, fall under the poverty line. And it’s solidly blue, voting nearly 67% for Democrat Kamala Harris for president over Republican Donald Trump in 2024.
Khanna, a rising star whose identify has already appeared on 2028 presidential polls, doesn’t make a lot of the web criticism that’s stemmed from his December put up — “Twitter is not real life,” he stated in an interview with The Mercury News. The congressman maintains that he nonetheless has “tremendous support” from enterprise and tech leaders who really dwell within the district.
“I would say it’s not that my views have changed, it’s that there’s been a move to the right by some of these MAGA folks who have abandoned some of the values that used to animate the Valley,” he stated, referring to Trump’s “Make America Great Again” backers.
Khanna says his support of upper taxes on billionaires is nothing new, and there must be what he calls a “new tech social contract” the place a tax on the rich helps fund providers like well being care, baby care and training.
He believes the latest ire from tech leaders is due to his work with Rep. Thomas Massie, a Kentucky Republican, to pry free recordsdata associated to the late convicted intercourse offender Jeffrey Epstein.
“There are prominent tech folks in those files, and I knew when I was taking on that fight with Massie that I would be upsetting a number of big Democratic donors, I’d be upsetting people in tech who I knew were going to be mentioned in those files,” he stated. “There’s a reason those files haven’t come out for 20 years.”
Agarwal has made lots of the similar arguments that Khanna did a decade in the past in pursuit of Honda’s seat, contending that the present consultant was out of contact with the wants of the district. While he acknowledges that plenty of the tech group is backing him, he isn’t relying on their support alone.
“The way to win this race has nothing to do with the backing of Gary Tan,” Agarwal stated of the Y Combinator CEO who lately launched a nonprofit to support “common-sense policies.” “The way to win this race is to listen to people and to be their representative and to physically be in the district.”
The congressional hopeful was born in Canada, however moved to the United States as a toddler, rising up within the close by communities of Saratoga and Los Gatos. He based two tech firms over the course of a decade, promoting the final one about 12 months in the past as he ready to enterprise into politics.
Agarwal has branded the congressman as “Trader Ro,” a reference to Khanna’s prolific inventory buying and selling — he had the third-highest buying and selling quantity in Congress final yr, in accordance with the nice authorities nonprofit Common Cause. If elected, Agarwal stated he needs to ban congressional inventory buying and selling and would divest his personal portfolio on day one. He lists eradicating childhood poverty, bettering public transportation and reducing well being care prices amongst his different high priorities.
But Agarwal faces a troublesome uphill battle in attempting to unseat a preferred incumbent. His first take a look at would be the June 2 major, the place he’ll have to garner sufficient votes to be one of many high two candidates, no matter political social gathering, to maneuver on to the November runoff. Two different candidates are additionally within the race — cybersecurity engineer Mike Katz, a Democrat, and Ritesh Tandon, an entrepreneur and the only Republican within the race. Neither of them has the monetary backing near Khanna’s and even Agarwal’s campaigns, which helps sign candidate viability.
Agarwal has raised greater than $400,000 within the first 4 weeks of his marketing campaign, with 56% of donations underneath $300. Khanna’s newest marketing campaign finance reviews gained’t be launched till later this month, however the congressman has a hefty warfare chest that he can faucet into if wanted, having raised greater than $9 million final yr.
Tan is optimistic about Agarwal’s possibilities and stated in a press release that he has sturdy support and is “committed to making sure that innovation and economic growth benefit more people, not fewer.”
“It’s not just about money backing candidates,” he stated. “It’s about the centrist revolt against politicians like Ro, who forget why they got elected and who they represent.”
Agarwal has additionally added Honda as considered one of his supporters — in a information launch, the 84-year-old former consultant known as him a “principled, authentic voice and an honest broker addressing 21st century issues.”
McCuan, the political science professor, stated the endorsement definitely doesn’t damage his possibilities, however he’ll want greater than a nod from Khanna’s former rival to oust the five-term incumbent.
Khanna doesn’t appear notably threatened by the brand new competitors and writes him off as a competitor who’s getting support from individuals who “were sympathetic to Trump” and significant of former Democratic President Joe Biden.
“They want just a free rein for business interests, but that’s not the average person in business or tech leader in my district or in Silicon Valley,” he stated.
Agarwal, nonetheless, contends that the congressman doesn’t absolutely perceive the wants of the Valley’s core business, which employs a big swath of constituents within the district.
“This race is about someone who understands what the fears are of the people who live in the district and acknowledges them and is someone who is willing to listen and not change their positions,” he stated.
