Billionaire Wealth Tax Simulator
Simulate gross revenue, behavioral avoidance, interstate out-migration, and PIT spillover risk for state and federal wealth tax legislation, calibrated to Forbes 400 and Fed DFA empirical distributions.
Fiscal Impact Assessment
Dynamic calculations based on cohort wealth distributionsWealth Bracket Demographic Matrix
| Wealth Bracket | Estimated Taxpayers | Total Bracket Wealth | Gross Tax Levy | Departing Taxpayers | Net Retained Yield |
|---|
Economic Foundations & Literature Calibration
State-level wealth taxation sits at the center of modern public finance debates. The simulator models the key tensions identified in peer-reviewed research by Emmanuel Saez, Gabriel Zucman, Enrico Moretti, Daniel Wilson, and Henrik Kleven.
1. The Interstate Mobility Dilemma
Unlike national wealth taxes (which require international expatriation and passport renunciation to escape), US states face interstate tax competition under the Commerce Clause. Empirical studies of the 1924–2004 state estate tax repeal show an interstate semi-elasticity of 0.05 to 0.12, meaning a 1 percentage point wealth tax can induce 5% to 12% of mobile billionaires to change primary legal domicile to no-income-tax states like Florida, Texas, or Nevada.
2. The Role of Phased Exit Taxes
Proposals like California Assembly Bill 259 (and constitutional amendment ACA 3) introduce a temporary "trailing nexus" or exit tax: departing residents remain subject to California wealth tax for up to four years, declining by 25% each year. This creates significant revenue clawback in the short term, giving the state time to amortize fiscal adjustments, though it faces pending federal constitutional challenges.
3. Income Tax Base Spillover Risk
The top 1% of California income earners pay roughly 50% of the state's Personal Income Tax (PIT). When ultra-wealthy individuals relocate their residency, the state loses not only the contested wealth tax revenue, but also their high-bracket PIT on capital gains, executive salaries, and dividend flows. The simulator factors in this counterbalancing fiscal drag.
Frequently Asked Methodological Questions
What empirical wealth distribution data does this model use?
The model relies on baseline data synthesized from the Federal Reserve Survey of Consumer Finances (SCF), the Federal Reserve Distributional Financial Accounts (DFA), and Forbes 400 state-by-state wealth registries. California's base models roughly 186 Forbes-listed billionaires holding $1.85 Trillion in combined net worth, alongside ~23,000 multi-millionaires in the $50M–$1B bracket.
Why did 8 Nobel laureates endorse the California billionaire tax?
In late 2024 and 2025, prominent economists (including Joseph Stiglitz and Angus Deaton) endorsed wealth taxation targeting unrealized gains and extreme wealth accumulation, arguing that capital income is undertaxed relative to labor income, that the revenue can finance high-return human capital investments (public universities, early childhood healthcare), and that extreme wealth concentration creates negative externalities in political democracy.
How is the 10-year cumulative yield calculated?
The 10-year model applies a baseline nominal capital appreciation rate of 5.2% annually to retained wealth, compounded against cumulative migration attrition, phased exit tax transitions, and avoidance stabilization.