The billionaire tax is a fiscal flop

California’s proposed “billionaire tax”  will collect less than half of what is promised — with a net fiscal effect that will leave the state in worse shape.The state is attempting a crazy fiscal experiment: seeing how much revenue it can raise by aiming a large tax at a small group of people who are superbly well-equipped to move themselves — and their money — somewhere else.The result isn’t likely to be positive — in the literal sense of the word — for the mad fiscal scientists pushing the idea.The Billionaire Tax Act, an initiative that could appear on California’s November ballot, would impose a onetime 5% tax on the net worth, above $1 billion, of anyone who was a state resident as of Jan.1, 2026. The initiative’s proponents claim it would raise roughly $100 billion, but their figure doesn’t survive contact with actual billionaires. In fact, according to research from our team at Stanford University’s Hoover Institution, the tax would collect less than half of what’s promised — and ultimately lose more money than it brings in.A simple Google search unearths the first problem with that $100 billion estimate: It draws from a base of payers that includes people who don’t live in California.

Proponents relied on the Forbes Billionaire List to make their calculation, but they didn’t verify residencies. Larry Ellison moved to Hawaii when Oracle’s headquarters relocated in 2020.Two others left well before the initiative was filed.

Erroneously including just these three billionaires inflated the estimate by about $15 billion.That’s only the beginning. Six more billionaires left the state between the initiative’s filing in October and the Jan.1 residency cutoff. These exits included Google co-founders Larry Page and Sergey Brin; PayPal and Palantir co-founder Peter Thiel; and film director Steven Spielberg.

Though just six individuals, this group represents nearly 30 percent of the state’s billionaire base — some $5...