Billionaires are fearmongering about California's proposed billionaire tax. Baloney. Just look at what happened when Massachusetts raised taxes on the rich.
Executive summary
California billionaires’ alarmist claims about a proposed billionaire tax find a useful counterexample in Massachusetts, where a 4% surtax on incomes over $1 million has produced billions more than expected while critics’ forecasts of a wealthy exodus have not materialized in headline data [1] [2]. But the Massachusetts experience is complex: revenue gains and some measures of millionaire counts rose, while scholars and analysts caution about data limitations, behavioral responses like income timing and avoidance, and differences in scale that make direct comparisons to California imperfect [3] [4] [5].
1. What happened in Massachusetts: real revenue, targeted spending, and political context
Voters approved the Fair Share Amendment in 2022, a 4% surtax on taxable income above $1 million, and Massachusetts collected substantially more than early forecasts—roughly $2.46 billion in the first full fiscal year and $2.99 billion in the second, totaling about $5.7 billion over two years and contributing roughly 3–5% of the state budget in those years according to multiple reports [2] [6] [1]. The law earmarked money for education and transportation, and state officials and advocates point to increased road maintenance, school investments, and restored budget capacity as tangible outcomes of the new revenue stream [7] [8].
2. The “millionaire flight” claim and why billionaires amplify it
Opponents—industry groups, fiscal alliances and some high-profile donors—argued during the campaign that higher rates would drive away wealthy residents and harm competitiveness, a narrative amplified by media and donor spending; examples include takeaways that the surtax made the state less business-friendly and cited departures such as at least one athlete who left for Texas [3] [7]. Those actors have clear incentives to protect low-tax environments and frame relocation anecdotes as systemic trends, an implicit political agenda noted in both advocacy pushback and news coverage [9] [10].
3. The empirical debate: more revenue and millionaires, but methodological caveats
Progressive researchers and state advocates point to increases in the number of residents with $1 million+ net worth and rising revenues as evidence that the surtax did not trigger a mass exodus and in fact has “expanded” wealth in the state [11] [2] [12]. Skeptics and economic commentators counter that some studies cherry-pick periods of nationwide income and asset growth—2018–2022 was a boom period for incomes and housing—and that measures using net worth (Wealth-X) differ from taxable income statistics, muddying attribution to the tax itself [13] [9] [10]. Academic work (Tufts, cSPA) finds that a surtax can raise “real money” without catastrophic economic fallout but cautions that cross-border moves and tax planning can reduce gross revenues by an estimated margin and that short-term macroeconomic impacts are likely small [4] [5].
4. Why Massachusetts’ experience isn’t a perfect roadmap for California
Massachusetts’ surtax targets incomes over $1 million and was implemented in a small, densely populated state with preexisting high costs and a specific fiscal structure; California’s proposed “billionaire” tax would operate at a different scale, potentially affect different income sources (capital gains, unrealized wealth), and interact with a much larger economy and migration patterns, a distinction underscored by analysts cautioning against overgeneralization [6] [5]. Moreover, critics of IPS-style analyses argue that different baselines and omitted variables can change inferred outcomes, so policymakers in California should expect both revenue potential and behavioral responses that may diverge from Massachusetts’ path [13] [11].
5. Bottom line: Massachusetts weakens the “fearmongering” claim but doesn’t settle the California question
Massachusetts provides a substantive rejoinder to blanket claims that high-earner taxes inevitably trigger mass departures: the state raised far more revenue than opponents predicted and did not see clear, headline-making millionaire flight in the short term, while funding targeted public investments [1] [7] [2]. At the same time, legitimate methodological debates about causation, measurement, and behavioral responses remain unresolved—and differences in tax design and scale mean California cannot simply copy Massachusetts’ outcome without careful modeling and transparency about assumptions [13] [5]. Policymakers and the public should therefore treat billionaire fearmongering as overstated in light of Massachusetts’ results, but also demand rigorous, state-specific fiscal and mobility analysis before concluding the risks are negligible [4] [6].