Progressive taxes fail—the rich will just leave

States soaking the rich, or considering it, include New Jersey, which passed a “millionaire’s tax” this summer, taking an additional two percent of any earnings that exceed $1 million. California is contemplating a retroactive measure that would take an additional 3.5 percent of earnings above $5 million. New York, both state and city, is considering new measures that would hit the wealthiest of the wealthy to pay for schools, homeless shelters, and frontline medical services. Lawmakers in Hawaii, Illinois, Massachusetts, Maryland, Oklahoma, Vermont, and Wisconsin have also proposed tax hikes on high earners.

In response, the wealthiest of the wealthy have broadcast a message: Pass the tax hikes and we’ll leave. The billionaire hedge-funder Ken Griffin has spent nearly $50 million—yes, you read that right—fighting Governor J. B. Pritzker’s progressive income-tax proposal in Illinois. If passed, it would mean “the continued exodus of families and businesses,” Griffin said in a statement. Any number of Silicon Valley investor types have threatened to flee to Nevada or Texas if California passes a wealth tax. President Donald Trump claimed recently that he relocated from New York to Florida because of high taxes. Some tax analysts are warning that raising taxes would not raise any additional revenue, precisely because the hikes would cause so many wealthy people to leave.