Mason  🏃‍♂️ ✂️

Whatever you think of a federal wealth tax, the debate has always meaningfully hinged on whether it causes capital flight. The people who would pay the bulk of this tax already have secondary residences in their favorite places, and they've been working remotely for months now.

Personally, I think the majority of people would stay >70%. I also think that a state trying this first would be a wonderful test for capital flight that would really inform the federal debate on it.

If 30% leave — not only failing to pay this tax, but no longer paying capital gains or income tax in CA — it will absolutely cripple the state. Especially if the departures are skewed toward the richest residents, some of whom are facing >$50 million *per year*

It's also not a very good test case for a federal wealth tax, because leaving the state is *dramatically* easier and lower commitment than leaving the country.

Is there a better test case for it? I agree it’s flawed and out of scale, but I can’t think of much short of a country. Country by country comparisons are often really weak and I don’t know how much better they would be.

This is a much worse comparison. People move between states all the time. For wealthy people who already own multiple homes, it's something that can be planned within a week. It's just not comparable. You might as well run human drug trials on fish.

What stops people from evading on state capital gains taxes when they can just relocate in a week? And is the income of those 30000 people going to make or break the system? I suspect most of those people evade through equity anyway.

Nothing stops them. That's my point.