Over the past six decades, 14 European countries have imposed a broad tax on personal wealth.
U.S. Sen. Bernie Sanders speaks during a rally in support of a proposed billionaires tax in California at the Wiltern in Los Angeles on Wednesday, February 18, 2026. has no antecedents in the United States.
European countries, by contrast, have spent decades experimenting with wealth taxes and their experience, which has been profoundly negative, can help California avoid repeating their mistakes. Over the past six decades, 14 European countries have imposed a broad tax on personal wealth. Most repealed them, with officials citing capital flight, disappointing revenue, high administrative costs and revenue losses from other existing taxes. Whereas the California ballot initiative applies only to billionaires, European wealth taxes tend to apply far more broadly. The three currently in effect in Europe kick in when net wealth reaches $200,000 . These European wealth taxes are riddled with exemptions, many of which benefit high-net-worth individuals. Notably, they have commonly exempted business ownership interests. This reduces the salience of such taxes for highly mobile, high-net-worth individuals, but also reduces the taxes’ potential yield. A combination of capital flight and wide-ranging exemptions has led to disappointing revenue performance, with these national wealth taxes generating, on average,about 200 of the state’s wealthiest households , but its application to those taxpayers’ net worth would be significantly broader. Therefore some effects — particularly capital flight by the highest-net-worth households — would be magnified. However, other impacts, on small business formation, for instance, are likely to be substantially attenuated.First, wealth taxes trigger capital flight. French, Swedish and Irish figures cited outmigration — and a resulting outflow of jobs, investment and entrepreneurial activity — as a rationale for repeal.that a 0.1 percentage point increase in a canton’s wealth tax reduces taxable wealth by 3.5%. In Norway, an increase in the wealth tax prompted more ultra-wealthy households to depart the countrySecond, wealth taxes undercut economic activity even among those who remain. Wealth taxes affect entrepreneurial decision-making, reduce returns on investment, introduce economic distortions and undermine job creation and business expansion. AThird, wealth taxes deprive governments of revenue from other taxes. Their collections are substantially offset by declines in revenue from income, consumption, property and other taxes driven by wealth-tax-induced capital flight and reduced economic growth.by scholars largely sympathetic to wealth taxation estimated that for every dollar generated by Scandinavian wealth taxes, 76 cents is lost under other taxes: 22 cents directly from migration responses and 54 cents from behavioral responses among those who remain.of the now-repealed wealth tax estimated that the government lost twice as much in reductions to other taxes as it generated from the wealth tax.of the now-repealed Irish wealth tax estimated taxpayers’ average compliance costs at 18.5% of wealth tax revenue, while government administrative costs were 14% of revenue.— a professor at the Paris School of Economics and UC Berkeley and one of the global architects of the wealth tax effort —the exemptions of European wealth taxes and acknowledges that outmigration and capital flight could be higher under the more aggressive wealth tax regimes he recommends . This would be particularly true of a state-level wealth tax, since expatriating from one’s country is far more difficult than moving across state lines. He recommends imposing heavy “exit taxes” — which would likely violate the U.S. Constitution — to prevent an exodus under more aggressive wealth taxes.A California wealth tax, at a rate higher than anything in Europe and applied to a far greater share of the wealth of highly mobile billionaires, doubles down on the economic harms that led most European countries to abandon them. Walczak is a visiting fellow with the California Tax Foundation and president of Walczak Policy Consulting. He wrote this for CalMatters.Defense Department tells San Diego military bases to remain on alert for attacksNavy will decommission 2 San Diego-based warships and a submarine this summerPadres add veteran outfielder Alex Verdugo on a minor-league dealFlock license plate readers cost city big, deliver little
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