There seems to be no end to the economic foolishness of political "progressives." The very name they use for their political philosophy - and I use the word philosophy in the broadest possible sense - is a great irony, in the sense that their policy proposals always end up in disaster: Jobs gone, productive people fleeing, economies crashing, dogs and cats living together, mass hysteria!
Seriously, though. Progressive policies always seem to result in this, because of the one result that the progressives never seem to see coming, no matter how many times it happens: They always propose to punish success and reward failure, with the result being the successful leaving; the successful, after all, have the resources to leave. This is contributing in large part to what we call the Great Sorting, which is going on in our country right now.
One of the dumbest ideas to come out of this crowd is the whole notion of a "wealth tax," which is really doubling down on stupid. California progressives are pushing such a notion by ballot initiative, although it hasn't made it onto the ballot yet, but it's still having the inevitable effect. City Journal's Jared Walczak has some details.
California’s proposed wealth tax hasn’t technically made it onto the ballot yet, and already the state’s three wealthiest taxpayers have publicly announced their departures. With just these three relocations, 38 percent of California’s billionaire wealth walked out the door, according to a new analysis of the tax I authored for the California Tax Foundation.
Proponents and critics of the 2026 California Billionaire Tax Act have debated how much the one-time, 5 percent wealth tax would raise, and whether fleeing billionaires will be able to avoid paying it. But an equally important question has received less attention: What happens to California’s other tax revenues when billionaires depart in response to the tax? As I show in the report, the Golden State stands to lose nearly as much as $4.5 billion per year from billionaire flight, quickly offsetting any fiscal benefit the one-time wealth tax might bring.
And the offset won't be a one-time thing. When these billionaires leave, they aren't coming back. The damage to California's economy, already struggling, will be lasting.
Eight California billionaires have reportedly already left the state: Larry Page, Sergey Brin, Mark Zuckerberg, Peter Thiel, Don Hankey, David Sacks, Jan Koum, Andy Fang, and Travis Kalanick. Real estate transactions by Steve Jurvetson and others have also prompted speculation. Other billionaires have almost certainly quietly relocated, and more are likely to follow.
This is what the Great Sorting looks like. The wealthy aren't just going to sit by, for the most part, and passively allow the state of California, or New York, or New Jersey, or Illinois, to turn them upside down and shake them until 5 percent of their money falls out of their pants pockets. Would you?
No, they are leaving, and they are leaving in droves. If California were serious about keeping these people and all the economic activity they generate, they'd lower its taxes, not raise them. And there's another problem; too many people, confronted by the term "billionaire," picture someone who has a big Scrooge McDuckian vault, in which is a swimming pool full of gold coins that they can dive into. That's not how any of this works. These people's money is in the economy, invested, helping businesses grow, helping new technologies develop, generating billions more in economic activity. That's how this works. That's what progressives will never understand. That's why the productive are leaving; this is a primary driver of the Great Sorting.
Read More: Viva, Las Vegas: Wealthy Californians Bolt to Nevada Over Looming Tax Hit
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There's one more reason that this dumb idea supercharges this migration of the productive, and that is that this is, at most, a state-level phenomenon. Why? Well, here's why, and I'm going to tell you: Fever dreams of progressive nuts like Senators Elizabeth Warren (D-MA) and Bernie Sanders (I-VT) aside, this can't be done at the federal level. Oh, they would like to have a federal wealth tax, but they can't. Article 1, Section 8 of the Constitution makes that very plain:
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.
That means that taxes have to be evenly apportioned, in accordance with the states' populations. To get the income tax required amending the Constitution, which was done with the 16th Amendment:
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
But at the state level?
Like so many progressive ideas, this wealth tax scheme will backfire, bigly. California's version isn't yet on the ballot, and this year, with all that's happening in the once-Golden State, who knows? For the first time in quite a few years, there's a possibility that California may elect a Republican governor in November. For the first time in many years, the GOP may chip away at the Democratic supermajority in Sacramento. Maybe Californians are starting to look around and see the rack and ruin that progressive thinking has wrought on their state. But if this does get on the ballot, and it passes?
Then the Great Sorting will swing into high gear, and we may well start seeing signs, "Will the last taxpayer to leave California, please turn out the lights?"
