Maybe this makes me a bad person, but I sometimes root for bad things to happen.

In my defense, I don’t like bad things, but in some cases I think bad outcomes will generate powerful evidence against bad policies. And this can result in a net increase in economic liberty if it means fewer bad policies are imposed in the future.

This is why, in the words of Dirty Harry, I sort of want California voters to approve a wealth tax this November.

Yes, the measure will be horrible for California, as I noted in Part I and Part II of this series. But that failure would provide powerful evidence to torpedo initiatives by Bernie Sanders and Elizabeth Warren to do the same thing on a national level.

Well, my Machiavellian wishes are one step closer to reality. As noted in a Wall Street Journal editorial, the initiative allegedly has enough signatures to get on the ballot this November.

Here are some excerpts.

Progressives are testing how much ruin there is in California. On Sunday they said they’ve gathered enough signatures to place a wealth tax referendum on the November ballot, even as a new study shows it is likely to result in less state revenue. The proposed ballot measure would impose a (supposedly) one-time 5% tax on individuals with more than $1 billion in wealth.  …Billionaires are already leaving the state. California Tax Foundation visiting fellow Jared Walczak estimates in a new paper that “reported departures already total $777 billion,”… By his estimate, the wealth tax exodus could total $1.23 trillion and reduce annual state tax revenue by $3.53 billion to $4.49 billion, mainly from lower income-tax collections. He calculates that “the net present value of these ongoing losses outstrips the one-time revenue projected by the initiative’s proponents effects.” …The referendum also lets the Legislature and Governor amend the tax, so Democrats won’t even need voter approval. The wealth tax would be the biggest act of economic self-sabotage in U.S. history.

But it’s even worse than portrayed in the editorial.

Here’s a tweet from Chamath Palihapitiya, a prominent venture capitalist who is rumored to have already left the state.

And you can understand his desire to escape since drafters have created easy pathways to dramatically expand the tax.

For additional evidence against the scheme, here are some excerpts from George Will’s column in the Washington Post.

Some of California’s wealthiest, who constitute a large portion of the state’s precarious fiscal base, are leaving. The richest 1 percent of taxpayers supply about 40 percent of the state’s personal income-tax revenue. …Capital and talent are mobile; they go where they are welcome, and remain where they are well treated. Wise states compete to be hospitable. Unwise ones, with self-defeating insouciance, ignore federalism’s incentives. They denounce such competition as a “race to the bottom.” The top, as those states define it, is a fantasyland where government can extract as much as it wants… Although the wealth tax is a cafeteria of unintended economic consequences, even cumulatively they are less ominous than one predictable, and perhaps intended, political consequence. The tax would effect a radical, and probably irreversible, change in the relationship of the individual to any government that enacts such a tax. …the infrastructure for administering the tax would mean a permanent enlargement of the government’s intrusiveness. This would contract the sphere of individual autonomy, and subtract from the security of liberty.

Let’s close by contemplating the most astounding (or most depressing) part of this debate.

As tweeted by Professor Josh Rauh of the Hoover Institution, one of the designers of the wealth tax openly admits that he’s willing to destroy a huge number of jobs and wealth to get a slight amount of new tax revenue.

This leads me to make two observations.

1. Saez’s comments remind me of the class-warfare advocates who want to bust the wage-base cap and transform Social Security from social insurance to income redistribution, even though $5 of private income is destroyed for every $1 of revenue the government collects.
2. Saez’s comments remind me that many of our friends on the left seem primarily motivated by hate and envy against those with higher incomes, even though they usually claim that their class-warfare schemes ostensibly are designed to collect more tax to help the poor.

The bottom line is that California’s wealth tax will be an utter failure if it is approved by voters. And I’ll be there saying “I told you so” with a big smile on my face because the already–very–strong case against a national wealth tax will be even stronger.

P.S. I’ll also cite Norway‘s disastrous experience with wealth taxation.

P.P.S. To give Emmanuel Saez credit, he was wise enough not to sign the 2023 letter against Milei, unlike his fellow class warriors, Thomas Piketty and Gabriel Zucman.