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Former Citicorp Inc. chief executive Walter Wriston once said “capital goes where it’s welcome and stays where it’s well treated.” The line has become tax-policy wallpaper. It is, nevertheless, the most useful sentence for thinking about what is unfolding in some jurisdictions, including certain states south of the border.

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In late April, the SEIU United Healthcare Workers West announced it had collected approximately 1.5 million signatures supporting the 2026 Billionaire Tax Act, a California ballot initiative imposing a one-time five per cent tax on Californians with a net worth of US$1 billion or more. That is nearly double the 875,000 required to qualify for the November ballot, and early polling suggests it has a real chance of passing.

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The mechanics are aggressive. The act uses two separate snapshot dates: residency is fixed as of Jan. 1, 2026 (the tax obligation date), while net worth is measured as of Dec. 31, 2026 (the valuation date). The tax is then payable on April 15, 2027, in up to five annual instalments, with a 7.5 per cent non-deductible deferral charge on any unpaid balance.

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Net worth would use voting-rights values for closely held shares, a methodology the U.S. Tax Foundation has said would overvalue founder stakes and could force the wealthiest Californians to dump enormous blocks of shares to fund their bills. The drafters anchored residency to Jan. 1 to forestall an exodus, a provision unlikely to survive review.

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The behavioural response is already well underway. Alphabet Inc. co-founders Larry Page and Sergey Brin and Oracle Corp. founder Larry Ellison have all reportedly taken steps to leave California or have already left.

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Those three relocations led roughly 38 per cent of California’s billionaire wealth out the door and the state stands to annually lose as much as US$4.5 billion in other tax revenue, offsetting any one-time haul, according to the California Tax Foundation. Even Democratic Governor Gavin Newsom is opposed.

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This is not California’s mistake alone. In New York City, newly elected Mayor Zohran Mamdani is pushing the Fair Share Act, a two-percentage-point increase on the city’s personal income tax for earnings of more than US$1 million. Combined with state rates, the top combined rate would approach 17 per cent, the highest in the U.S.

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New York Governor Kathy Hochul has so far refused the required cooperation. Mamdani’s threatened fallback is a 9.5 per cent across-the-board property tax increase, which would fall hardest on those least able to bear it.

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At the federal level, Senator Elizabeth Warren reintroduced her Ultra-Millionaire Tax Act of 2026 in late March: a two per cent annual wealth tax on net worth over US$50 million, a one per cent surtax on billionaires and a 40 per cent exit tax on anyone above the threshold who renounces U.S. citizenship. The bill is unlikely to pass the current Congress, but the political signal is unmistakable.

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The international comparison cuts the other way. Australia spent two years pursuing Division 296, a proposal to tax unrealized gains on superannuation balances over three million Australian dollars, before the government walked it back in October 2025 after significant political fallout.