If you tax them, will they leave?

It's hard, but possible. However the goal of people who created current tax code is exactly opposite: to create system with loopholes.

US tax code is a mess, there should be less amount of different taxes, more unified taxes.

Georgism, a single tax on the unimproved value of land

Just curious: what makes you come to this conclusion?

I don't know who should pay what amount, but I'm pretty sure that me and that millionaire should have different tax brackets. Let alone people with tens, hundreds of millions or more.

PS: I'm in EU, not USA, but here I'm in a highest tax bracket so the point still stands, my tax rate is the same as for any local millionaire. Maybe even more, since those people are aggressively utilizing tax loopholes, shell corporations and offshore tax havens.

It's actually pretty easy to pay an 80%+ tax rate in California if you consider taxes that your employer pays, sales tax (11%+ in some areas), local assessments, capital gains tax, etc.

Of course, you're also going to have to face the problem that representative democracy includes the ability to buy loopholes.

And then, there are unintended consequences because representatives aren't necessarily the most financially savvy. I'm thinking about the 401k program that disproportionately advantages high income people when it was touted as a savings route for middle class people.

I agree you should want to avoid having an income disparity like this, but we are where we are. The goal of this tax is to help correct that disparity.

One argument could be that maybe entrepreneurial personality traits aren't normally distributed, and unless you find a way change people's personalities in mass, the imbalance in wealth attraction will remain inherent.

Then you might ask, if that's true, do you I want to enforce equality, potentially dragging down the economy to mediocracy (for example many stagnating European economies) or maybe accept that current nature does not meet our societal desire for equality.

The actual question is: "If we tax tax them, will they leave? (losing the planned tax revenue/backfiring)"

It is pretty easy to avoid state taxes - just move to a different state.

The increase in wealth of billionaires in 2025 was $1.5 trillion: https://americansfortaxfairness.org/billionaires-1-5-trillio... Most of that isn't even real money--it's people betting on AI. (As an aside, is the government going to give huge tax refunds when the AI bubble bursts and all that "wealth" disappears?)

If the U.S. just taxed people the way they do in Germany we could raise trillions in revenue without resorting to tricks like one-time wealth taxes. The focus is on billionaires because Americans want a German-style welfare state without German-style taxes on the middle and upper middle class.

70K a year is poor in California, but top 1% rich in almost any country in the world.

Low income disparities are countries like Albania, Afghanistan, Armenia to name the first three with below 30 GINI income.

Sounds like US vs Europe. Having redistributive policies funded by taxes works well until your most productive people flee for a country that doesn't, and you steadily lose ground to competitors economically.

So if you get a $150M loan off of your amazon shares that on paper are worth $150M, but you paid $100M, you have a cap-gain of $40M, and at 20% tax, $8M fills the IRS's coffers.

Mandami, AOC, and Sanders are the laughing stock of much of the electorate in the US. They are fairly popular in progressive population centers but not elsewhere. There have been activists promoting much the same ideas for my entire life (and I'm not young!) and they rarely if ever get national traction.

The "silent majority" in the US is just that - they don't make the news because they, in most cases, don't go out and protest and engage in battles with law enforcement. They have jobs, go to work, go home to their families, and vote - but they rarely are seen in the news any more than the fact the sun came up in the East and set in the West yesterday is "newsworthy" enough to be promoted in the media. "If it bleeds, it leads" is the criteria for being newsworthy.

I think this comment is a little off-topic.

That figure is highly misleading to cite by itself because the high tax rate also came with a bunch of loopholes and exemptions. That's why despite the drop in the headline rate of 70-90% or whatever, the actual tax take as % of GDP has remained remarkably steady in the past 7 decades.

https://fred.stlouisfed.org/series/FYFRGDA188S

So it's not like it was actually a tax on the wealthiest, more a targeted tool to apply state power.

For example GWB "lived" in texas the whole time he worked in washington.

The loss of the richest man in the village might mean the baker now has to kowtow his prices to his less well-to-do neighbours again

https://worldpopulationreview.com/country-rankings/happiest-...

The wage earners feel the inflation in their wallets.

Can they take a loan on existing stock? Yes. You can leverage assets and this, itself, leads to some pretty unfair things. No need to inflate it to the idea that "getting paid in stock means you don't pay taxes."

I don't get why we have to jump all the way to a wealth tax, could they not just force asset backed loans to trigger a tax? This seems way more targeted and we won't have people assessing what everyone is worth. I think it would avoid some unnecessary precedent setting. They could put the impetus on the billionaire taking the loan to state what the assets are worth and related gains.

How's this different than if CEOs or whatever were paid in cash, and then they immediately bought stocks with the cash?

Unfortunately for California about 40% of the total state income tax collected (which accounts for about 65% of the state general fund) is paid by the top 1% of income earners -- which includes those 0.001% who will be motivated to move by a wealth tax (or even merely the threat of one).

The <0.001% number appears to be based on population _before_ several billionaires moved out before Jan 1, 2026 - likely at least partially motivated by the small, but real, risk of the "billionaire's tax" qualifying for the ballot and passing (and that proposed tax is only "temporary" and is only a total of 5% over three years so isn't nearly as alarming to the wealthy as a "permanent" tax would be). If it looks like this measure will end up on the ballot and have a chance of passing, expect many more to leave. This will, even if it does not ultimately pass, erode the income tax base.

California has rebelled against wealth taxes in the past - most notably by the passage of Prop 13 almost 50 years ago (a property tax is a wealth tax). They are not popular except when the hit "the other guy" -- but "the other guy" is the one most able to avoid the tax.

Wealthy people are typically very flexible as to where they live. They often already own multiple homes and often spend a lot of time out of the state they "live" in. When they move, they are not packing and labeling their own boxes or are likely even present on "moving day". They also are more likely to set up HQ and shop near where they spend a lot of their time. Even if they have family in California, they can still get together with them for Thanksgiving dinner -- either by flying the family to them on their private and chartered jets or by themselves flying to California for the weekend on one of their jets. They can conduct most business very efficiently remotely and often do so now to a significant extent.

It only takes a few to leave to tank the California budget - likely causing the progressive income and wealth taxes to reach deeper and deeper into the upper middle classes as California desperately tries to balance their budget without cutting yet more programs.

Other states are loving this though and will cut tax deals to attract these very billionaires that California are encouraging to leave.

If everyone would be able to play these tax avoidance schemes I'm sure society would collapse. For big players these are easy schemes and somewhere this untaxed wealth must be recaptured. Just favoring the rich further accelerates the wealth imbalance.

It's like in a combustion engine. Oil has to be added for the engine to work. But over time, dirt particles, metal abrasion, soot, and combustion residues accumulate in the oil, overwhelming the oil filter and reducing its lubricating ability. If you don't reset it to a “healthy” basic state at regular intervals, it gets so bad that it prevents the engine from operating and ultimately even destroys it.

Does the massive wealth inequality we see today cause problems that lead to the erosion of society itself? I would say yes, definitely. Of course, it is frustrating for these people when the money they have generated is taken away from them. But let's look at it realistically: if someone has $100 billion and $99 billion is taken away from them, they are still in a situation where they lack nothing financially.

At some point, you've played capitalism through to the final level. And then you should put down the controller and go outside to listen to the birds chirping instead of frantically chasing after the growth of a number that, due to its sheer size, no longer has any concrete meaning, apart from the fact that there may be two other people whose numbers are bigger or who are hot on your heels.

I’m genuinely baffled at the incredulous tone here. Yes, that is exactly what should happen: laws, subsidies, and incentives enable a company to grow and flourish. Then, as the company grows, other laws incentivize it to give some of its state-sponsored affluence back to benefit the country.

Like, sure, the execution of that process is often dysfunctional, but the fundamental contract there does not seem like it should be surprising to people: we don’t have (many) socialist state-owned businesses, but the point of a functioning country is still to provide good things to the people living in it. Not to benefit businesses or a tiny sliver of the population.

That’s why we have everything from income taxes to interstate highways: to distribute wealth and resources to (a flawed approximation of, but it’s still the goal) everyone in the country. That’s just how non-corrupt governments are supposed to work!

If they all had unified in one voice against the administration, Trump might be more constrained. They might not be so hated. If they realized, like Henry Ford, that a strong middle class actually is good for THEM too, all this could be avoided. Instead they’re showing up at Melania screenings while average citizens are getting shot in the streets.

I don’t think they realize the fire they’re playing with my stomping on the social contract that made them so wealth.

But that is usually a fairly large group, and if they feel taxes are too much, they will listen to any politician that promises a solution.

Then it can become pretty nasty...

Just because someone has "communism" on paper doesn't mean the society actually functions according to the communist idea.

Social democracy has been tried in many places and it has produced things such as the Nordic Model and the Nordic states that have been very successful.

After the 2nd World War USA was very close to socialism. High wealth taxes, workers unions etc. As a result your average worker had a lot of purchasing power which of course fuels economic strength.

In fact many if the world's best performing companies are a kind of exercise in socialism since the RSU programs share ownership and results of the company to the workers (even if it's a small share)

Capitalism's final form is a dystopian hellscape of rivers that can be lit on fire, unbreathable air, leaded gasoline, asbestos ceilings, company towns paying scrip, strike break private militias, opioid epidemics (wild this isn't a one time thing for Capitalism, but then the model for Capitalism seems to endpoint with getting people addicted to the product).

Everyone can agree pure Capitalism is a miserable failure that creates an unsafe environment and product landscape based on addictiveness. Time after time when left to their own choice, Capitalists chose making a worse world. The Capitalism model requires tight constraints from society to prevent Capitalists from creating an horrific, awful world like they have every time in the past when left unregulated.

The question is why do we make sure Capitalism can't destroy our rivers anymore, or pay workers in scrip (creating their end goal ideal of an inescapable labor system) but when they economically destroy the civil fabric with unequal wealth distribution we somehow refuse to step in? Capitalists long term will NEVER chose societal benefit, yet somehow we keep hoping they will and under regulating them. I remember when extremely liberal friends started getting their vested options and them excitedly talking about the whole loan model to not have to pay taxes, even though they 'supported' high taxes and knew the societal benefit.

This is still not a good idea for you, as the interest doesn't make up for inflation. Most people keep a small portion of their wealth in the bank, as easy access for emergencies (this is called dry powder[0]). The rest is typically invested into private equity, which allows new ventures to be created.

It's very rare for anyone to have more than $50m in the bank. The money is usually out in the market doing it's work.

[0] - https://www.investopedia.com/terms/d/drypowder.asp

I would hesitate to call consumption "better" than investment.

The health of an economy is defined by the permeability of the border between those two classes, and the direction of flow.

If the flow is mostly one way, you're getting wealth extraction, not investment.

But assets are not easy to move. So if you tax assets and not income, it doesn't matter where the owners are. It only matters where the assets are.

1) velocity of money matters, some spending creates more economic activity than others due to re-spending.

2) Investment is not the same as having your money sitting idle. Investment makes certain activities possible because of scale, payment made with the expectation of future value, financing capital goods or R&D, etc.