Whether billionaires would pack up and go was the main argument in California's Proposition 40 fight. Voters rejected the measure 52.8% to 47.2%, but the question will come back. The union behind it plans to try again in 2028 if lawmakers don't find another way to fund healthcare.

Most coverage either counts the people who left or declares flight a myth. The research is more specific than either. It separates people moving away from people hiding their wealth, it asks how many would have left anyway, and it checks what happened to revenue.

What happened when Norway raised its wealth tax?

A few rich Norwegians left, but revenue still went up a lot. Since 2021, Norway's centre-left government has raised the wealth tax rate from 0.85% to 1%, and to 1.1% for the largest fortunes.

Headlines followed. Filings to Norway's population registry showed at least 30 billionaires and millionaires moved to Switzerland in 2022. AFP later reported more than 100 of the wealthiest left from 2021 to 2023, mostly for Switzerland.

Those counts include everyone who left, for any reason. A 2026 NBER study by Marius Ring tried to isolate the people who left because of the tax changes. The changes went beyond the headline rate: they raised dividend taxes, closed exit-related capital-gains loopholes, and nearly doubled the effective marginal tax rate on business wealth. Ring found at most 100 people left because of the reforms. Most were in the top 0.1%, most left in 2022–2023, and there was no significant outflow of startup founders or inventors.

The revenue result gets less attention. Ring estimates that with no one leaving, Norway's wealth-tax revenue would have risen 75% from 2021 to 2024. With the departures, it rose 71.5%. Companies owned by the people who left stayed active and didn't cut investment.

One more detail matters: Switzerland, where most of these Norwegians went, has wealth taxes of its own. They moved to a lower wealth tax, not to a place with none.

Is moving the main way rich people avoid a wealth tax?

Not in the best Swiss evidence. Hiding or sheltering wealth seems to matter more. Swiss wealth tax rates differ from canton to canton, which makes them a natural test case. A 2022 study by Brülhart, Gruber, Krapf and Schmidheiny found that cutting the wealth tax rate by one percentage point raises reported wealth by at least 43% after six years.

They then broke that response down. People moving between cantons explained about 24% of it, and house-price changes about 20%. Most of the rest appears to be evasion, because financial wealth isn't reported to Swiss tax authorities by banks or other third parties.

Didn't France's wealth tax fail?

It did, and even one of Prop 40's backers says so. Gabriel Zucman, one of its main academic backers, writes in his new book that past wealth taxes "by and large, have been abject failures." He blames loopholes, such as France's exemption for owners' shares in their own businesses, along with some flight.

France scrapped its wealth tax in 2018. How much of its reported millionaire exodus the tax actually caused is still disputed.

Did billionaires actually leave California because of Prop 40?

Some moved before the deadline. Whether they legally escaped the tax was never settled. Prop 40 was a one-time 5% tax on the net worth of anyone who was a California resident on Jan. 1, 2026. It was announced in late October 2025, which gave billionaires about two months to move.

Stanford economists counted seven who left before the cutoff: Larry Page, Sergey Brin, Peter Thiel, Don Hankey, Steven Spielberg, Travis Kalanick and David Sacks. Other reports put it at six of the state's estimated 214 billionaires.

Moving isn't the same as ending your tax residency, though. Zucman argued that legal experts thought it unlikely any of them had ended California residency in time. He pointed to Brin, who moved to the Nevada side of Lake Tahoe but still often commutes to Silicon Valley. Stanford's Joshua Rauh said Brin likely did establish Nevada residency. With the measure defeated, there will be no residency audits under Prop 40, so this may never be resolved.

Others chose to stay. Mark Zuckerberg reportedly agreed with Meta's board to stay in California for eight years, with conditions, under a deal letting him pay the tax by selling nonvoting shares. Nvidia's Jensen Huang said he was "perfectly fine" paying a bill of roughly $8 billion.

Why did economists' estimates for Prop 40 differ so much?

They made very different assumptions about who would leave and what that would cost. Emmanuel Saez, Zucman and their co-author Boll estimated about $100 billion in revenue. They took 5% of $2.3 trillion in California billionaire wealth and cut it by just 10% for avoidance, evasion and early departures.

Rauh and Benjamin Jaros estimated the measure would cost California $39 billion on net. Their steps:

  • Subtract about $30 billion for the seven who left.
  • Cut the remaining revenue in half for legal risk.
  • Subtract permanent income-tax losses from more billionaires leaving out of fear of future wealth taxes.

That last step caused the sharpest fight. Zucman called the method "absurdly one-sided" because it counts losses from fleeing hypothetical future taxes but none of the revenue those taxes would raise. Rauh replied that counting revenue from taxes nobody has proposed would be absurd.

There's a limit on how big the income-tax loss can get. Saez and Zucman's team estimates California billionaires pay state income tax equal to about 0.2% of their wealth a year, which is 2.4% of the state's income-tax revenue. The state's nonpartisan Legislative Analyst's Office landed in between. It found the tax would likely raise up to tens of billions of dollars over several years but cut income-tax revenue by hundreds of millions of dollars or more each year as some billionaires left.

Does a one-time tax cause less flight than an annual one?

Supporters argue it does, but no real-world case has tested it. Economist Teresa Ghilarducci argues one-time taxes cause far smaller migration than recurring ones. She cites research by Young and Varner showing near-zero long-run migration among millionaires in New Jersey and California.

Two caveats. Her piece is openly in favor of the tax. And that research looked at income-tax changes and millionaires, not wealth taxes and billionaires. Rauh's estimate rests on the opposite bet: that a one-time tax signals more to come, so people leave anyway. Both sides are reasoning from assumptions here, not data.

Does evidence from Norway or Switzerland apply to California?

Only partly, because it's much easier to leave a state than a country. Moving from California to Nevada doesn't mean a new language, passport or national tax system. Even Zucman and Rauh agree flight would be smaller under a national tax.

Every major study looks at a country or at Swiss cantons. None covers a one-time tax applied to residents as of a past date, which is what Prop 40 was. No one has measured how much bigger the flight problem is for a US state.

California has also gone without a tax on fortunes at death since 2005. That year Congress eliminated the federal state death-tax credit, and California's estate tax lapsed automatically.

What happens now?

Billionaires spent $378 million against the measure, outspending supporters more than 10 to 1. Union president Dave Regan says the 2028 retry is "not a hypothetical."

Nobody knows yet how many billionaires will leave California anyway with that threat in place. That would be a real-world test of the "fear of future taxes" idea at the center of the economists' fight.