Capital Flight Cuts Wealth‑Tax Revenue

A proposed California one‑time wealth tax prompted wealthy residents to leave before the measure even reached the ballot, removing an estimated $536 billion from the tax base and cutting projected revenue from about $100 billion to roughly $40 billion, while also risking the loss of future income‑tax payments that could exceed the windfall. This shows that behavioral responses by the targeted group can swamp headline revenue estimates and produce net fiscal losses for the state. — Policymakers, voters, and reform advocates need to account for real behavioral responses (pre‑emptive relocation and lost future taxes) when designing taxes targeted at mobile high‑net‑worth individuals.