Rep. Ro Khanna of California represents Silicon Valley, home to many of the tech companies that members of his party are talking about breaking up. The second-term Democratic congressman is also co-chairman of Sen. Bernie Sanders’s presidential campaign.
The 43-year-old — the son of Indian immigrants and a former lecturer in the economics department at Stanford — recently spoke with the Washington Examiner about his thoughts on the regulation of tech, wealth taxes, and other topics being debated among Democrats.
Washington Examiner: Thoughts on Bernie [Sanders] and what he’s said many times, that billionaires shouldn’t exist and his wealth tax that could eradicate much of their wealth over a number of years?
Khanna: I have no problem with Steve Jobs or Elon Musk being billionaires. What I want to make sure is that people in minority communities, rural communities have the opportunity to have the jobs of the future. That they get STEM [science, technology, engineering, and math] credentials or education that they are able to go to college without going into debt. That they’re able to get a quality public school education. That they’re able to have access to good jobs. That’s my concern. The dearth of opportunity in so many parts of this country.
Washington Examiner: So you disagree with [Sanders] regarding billionaires?
Khanna: I don’t know. I mean, I think that we, if someone is doing what Steve Jobs did, or Elon Musk, I don’t have a problem with them being billionaires. I think there are people who had extractive ways of making billions of dollars, and that has to be dealt with [through] regulation. But do I have a problem with Bill Gates being a billionaire and then contributing billions of dollars to fighting malaria in Africa? No.
Washington Examiner: Any particular thoughts on the wealth tax that is being discussed a lot within the Democratic primary? [Sanders has proposed a progressive wealth tax on taxpayers with wealth above $32 million.]
Khanna: It definitely needs to be explored. But you know, I think we have to start with this premise: Bill Clinton left this country with budget surpluses, and then, three things happened. The George Bush tax cut to the 1%, wars of $6 trillion in Afghanistan and Iraq, and the Trump tax cut to the very wealthy. If you reverse those three, you would be left with budget surplus, and you could probably raise a lot of the revenue for free public college, for infrastructure, for universal childcare, for expanding your tax credit. So I would start with those three things.
Washington Examiner: So currently, are you in favor of a wealth tax?
Khanna: I’m in favor of looking at it. But I would start with the reversal of the Bush and Trump tax cuts to the 1% and the reversal of interventions overseas. I think it should be on the table, but we should start with that. And then we should look at it. And then we should look at it in a way that’s going to be well-designed.
And we have a wealth tax in this country, it’s called the estate tax. And what I would first try to do is close the loopholes. I mean, there’s so many people who aren’t paying the estate tax, why aren’t we closing some of those loopholes? And how would we design a wealth tax that wouldn’t be subject to the same evasion that is subject currently in the estate tax? So what I’d first do is try to close the loopholes, and then I’d be open to it if it can generate revenue. But I think we have to be realistic about how much revenue it would generate based on historical experience with tax avoidance and make sure that whatever we do is grounded in proper economics.
Washington Examiner: Regarding the 2020 candidates, [Sanders] himself and then Warren, of course, and a number of other Democrats have called for the breakup of big tech companies, and some Republicans even have gotten behind this, with [Department of Justice] antitrust chief [Makan] Delrahim talking about this yesterday — what makes you differ from some of them?
Khanna: I believe in strong antitrust laws. But I think that we have to have well-crafted antitrust laws. So what I would focus on is that companies shouldn’t be able to advantage their own platforms. I would be skeptical of horizontal mergers and really scrutinize companies from either copying their competitors or acquiring their competitors. But I wouldn’t just reflexively break up companies without consideration. What I would look to is the Microsoft case, where Microsoft wasn’t broken up. The D.C. circuit [court] actually struck that down. But Microsoft wasn’t allowed to tie Internet Explorer with Netscape; that led to Google emerging and a lot of companies emerging. So that provides a thoughtful way of having strong antitrust protection.
Washington Examiner: So what circumstances do you think you would be supportive of breaking up big tech companies in Silicon Valley, for example?
Khanna: Well, if there was [an] investigation by the [Federal Trade Commission] and Justice Department and a fact-based investigation that concluded that there was some major antitrust violation that required that remedy, I would support what the civil servants investigated. But I think there has to be a fact-based, nonpolitical determination. What Congress should do is strengthen the antitrust laws in making sure that we’re regulating companies so that they don’t privilege their own platforms.
Washington Examiner: So you would go with whatever recommendation the FTC and DOJ made on particular investigations?
Khanna: I mean I would not override it, but I would also make sure that whoever I was recommending to the president to be appointed would be someone independent and wouldn’t be someone who came — who was either too sympathetic to industry or who was either biased against industry.
Washington Examiner: What specific actions do you hope occur from the investigations into Google, Facebook, Apple? I know FTC is investigating Facebook [and] the DOJ, Apple and Google.
Khanna: They need to focus on platform neutrality. That Google or Facebook or Amazon or any company shouldn’t be able to say that it uses its own platform to advantage its own products, these platforms should be largely neutral, and they should focus on making sure these companies aren’t acquiring competition to prevent competition from emerging.
Washington Examiner: As in the issue of being umpires and referees and players at the same time?
Khanna: Yes, for example, Amazon shouldn’t be able to put Amazon basics high up on the search or Amazon should be able to copy someone’s small business’s product and then use the data it acquired to outcompete them and drive them out of business.
Washington Examiner: I was curious about your thoughts on the ‘hipster antitrust’ movement that Lina Khan and others have kind of created in the past couple years — that the definition of antitrust law should be about more than just consumer welfare and about wages and jobs and other metrics.
Khanna: I agree with that. I think that consumer welfare is a primary consideration. But there also has to be consideration for the impact on communities, for the impact on jobs, for the impact on wages. And that’s very important. Now, I wouldn’t go as far as Europe, where the antitrust laws actually protect the competitor. But I think you can have a balance going back to Brandeis’s original conception or the original conception of the Sherman Act or the Clayton Act — that you did want to consider the impact on communities and jobs and wages.
Washington Examiner: [Khan] and others want to drastically rewrite the law to have much broader, sweeping definitions. Are you in support of really changing and rewriting the law?
Ro Khanna: I’m in favor of moving away from the Robert Bork strict definition of consumer welfare being the only thing that matters and introducing other factors as consideration. But you know, I’d have to look at the specifics of that. But as a framework, I think, it shouldn’t be consumer welfare is the only consideration.
Washington Examiner: What are some of the other specific considerations?
Khanna: Jobs, wages, impacts on community. So you could, for example, conceive of the FTC evaluating a merger saying it’s going to be good for consumer welfare, but it’s going to have a displacement effect on jobs and wages and particular communities and charging a tax on the company to make up for that displacement if they’re going to approve the merger. So my view is that consumer welfare has to still be the guiding principle, but you have to also look at other considerations, and you can’t make those other considerations irrelevant.
Washington Examiner: Do you think we have ways of accurately analyzing such economic metrics like wages and jobs when a merger is happening?
Khanna: I think we can. I think consumer welfare is also not a precise science. So, we have to look and make our best efforts, and then courts will have to do that, and regulators will have to do that.
Washington Examiner: Are there any particular areas that you think we can look toward Europe in terms of antitrust or why do you think they haven’t had innovation the way that we’ve had?
Khanna: They don’t have a First Amendment. They don’t have the same entrepreneurial risk-taking culture. They don’t have the same immigration. I mean, people still from around the world want to come to the United States and Silicon Valley, comparatively. They don’t have the same access to capital. They don’t have the same research universities.
Washington Examiner: Do you think there’s anything in particular related to their laws or regulations around tech companies?
Khanna: I don’t know about that. I mean, I think it’s more just the entrepreneurial culture, the culture of welcoming immigrants, the culture of risk-taking, the First Amendment that has given America an advantage.
