Wealth Tax Impact & Relocation Simulator
Evaluate proposed net worth taxes on ultra-wealthy residents. Calculate baseline revenue, relocation elasticity, ongoing income/capital gains tax attrition, and net 5-year budget yields.
Bracket Segmentation & Outflow Vulnerability
Pareto wealth distribution modeling across wealth tiers
| Wealth Bracket | Est. Population | Cohort Wealth | Effective Levy | Relocations | Net 5-Yr Yield | Flight Risk |
|---|
Policy Assessment: Favorable Short-Term Net Gain
With an elasticity of 0.08 per 1% tax hike, California retains 87.2% of its billionaire base. Despite $1.44B/yr in forfeited top-bracket income tax from relocated residents, the one-time wealth levy still generates a massive net fiscal surplus over the 5-year budget horizon.
The California Billionaire Dilemma
California hosts roughly 250 billionaires commanding near $2.0 trillion in combined assets—wealthier than the GDP of most G20 nations. High wealth inequality has triggered recurring ballot initiative proposals to levy one-time or recurring taxes of 1% to 5% to fund healthcare, education, or climate infrastructure.
However, California already depends on high earners for over 50% of its personal income tax (PIT) receipts. When ultra-wealthy founders or investors relocate to zero-income-tax states like Nevada, Texas, or Florida, the state permanently forfeits substantial recurring income and capital gains revenues.
Methodology & Elasticity Equations
How does the relocation elasticity model work?
Our simulation applies empirical microdata estimates from international wealth tax rollouts (France ISF, Norway, Switzerland) and domestic state tax research (Moretti & Wilson, Kleven et al.). Outflow percentage = min(90%, TaxRate × Elasticity × AvoidanceMultiplier).
What is the Breakeven Elasticity Threshold?
The breakeven elasticity is the behavioral responsiveness at which the lifetime loss of recurring state income and sales taxes exactly cancels out the static revenue collected from the wealth tax.
How is the wealth distribution distributed?
We use a standard Pareto power-law distribution (α ≈ 1.35) fitted to Forbes 400 and Bloomberg Billionaires Index data for California residents, dividing the cohort into mega-billionaires ($20B+), multi-billionaires ($5B–$20B), and entry billionaires ($1B–$5B).