Billionaire investor Bill Ackman, who runs hedge fund Pershing Square Capital Management, spent his weekend doing what billionaires apparently do these days: publicly breaking up with politicians on social media. His target? Rep. Ro Khanna (D-Calif.), who Ackman says has "lost his way" by defending California's controversial new wealth tax proposal.

The Flip-Flop That Started It All

Ackman's beef centers on what he sees as a stunning about-face by Khanna. In a post on X, Ackman dug up a 2024 CNBC clip showing Khanna arguing against a "blanket tax on unrealized gains," explaining why he thought it was bad policy. Fast forward to now, and Khanna is vocally defending California's proposed measure that would do exactly that—tax the assets of residents worth over $1 billion, whether or not they've actually sold anything.

"Ro Khanna has lost his way. I used to support him," Ackman wrote, marking a decisive split with the typically business-friendly Democrat over this philosophical shift.

California's Billionaire Tax Gamble

The controversy revolves around a California initiative that could slap a 5% tax on billionaires' net worth. Not their income. Not their capital gains. Their total wealth.

Ackman has called this path "self-destruction" for California, warning that aggressive taxation will simply push entrepreneurs and job creators to friendlier states. He's not alone in his concerns. Reports suggest tech heavyweights like Peter Thiel and Google co-founder Larry Page are already eyeing the exits to avoid the potential levy.

Venture capitalist Chamath Palihapitiya piled on, warning the tax could "kill entrepreneurship" by forcing founders to liquidate their holdings just to pay taxes on paper wealth they haven't actually realized.

Khanna isn't backing down, though. He's dismissed the exodus threats, arguing that critics are "glossing over Silicon Valley history" and that the region's deep talent pool and innovation ecosystem matter more than any individual billionaire's zip code.

Market Update

While politicians and billionaires squabble over tax policy, markets closed out a shortened Christmas week on a cheerful note. The S&P 500 climbed 2.02% for the week, while the Dow Jones rose 1.53% and the Nasdaq Composite advanced 2.04%.

Year-to-date performance looks even better. The S&P 500 is up 18.09%, the Nasdaq Composite has gained 22.37%, and the Dow Jones has added 14.91%.

The SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust ETF (QQQ), which track the S&P 500 and Nasdaq 100 respectively, closed Friday with SPY down 0.010% at $690.31 and QQQ declining 0.0064% to $623.89.

Futures for the Dow Jones, S&P 500, and Nasdaq 100 indices showed mixed signals heading into Monday trading.