Modeling a Wealth Tax: http://paulgraham.com/wtax.html
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I see. I think great founders will start companies in the place that maximizes the chance they create an Amazon-level success, not in the place with the lowest taxes. At some point taxes may be too aggressive but a low single digit wealth tax isn't that.
It's not as simple as that. There are many good founders outside CA who are already on the fence about moving there. When you're already on the fence it takes very little to tip you. Giving up half your company if you move, versus none if you stay, could easily be enough.
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Incidentally, I'm not sure if you realize this, but Amazon is only in Washington because it has no sales tax.
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Corporate taxes that have a direct impact on the ability to run a profitable business (a state tax on online sales vis a vis Amazon being a great example) are quite different from personal wealth taxes.
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Given that the interest you can earn on accumulated wealth is greater than a 1% wealth tax, it's still most rational to optimize for the place that let's you create great wealth in the first place.
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It's possible that moving your company to California would make it 3x as valuable, so that you'd still be net better off after giving half of it to the government, but would you claim that publicly?
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