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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
In February, the Netherlands’ lower house passed a 36 per cent tax on actual returns — including unrealized gains on stocks, bonds and cryptocurrencies — to be implemented in 2028. Shortly after, the Dutch finance minister conceded the bill “cannot proceed as it is” after the Senate signalled some objections .
Two of the few major economies to have tested unrealized-gains taxation are now walking it back.
Canadians have lived through a version of this already: the 2024 federal capital gains inclusion-rate increase was structured around a poorly designed $250,000 annual threshold that would not be subject to the increase, a targeting mechanism designed to insulate ordinary taxpayers while extracting more from the so-called wealthy.
The proposal was eventually abandoned , but the underlying mindset — that affluent Canadians can be asked to contribute a little more without behavioural consequence — remains.
The empirical record is plain. The wealthy move if they feel their capital will be treated better elsewhere. For example, there was a net domestic outmigration of roughly 200,000 taxpayers from California in 2023, with the heaviest losses in upper-income brackets, according to Internal Revenue Service migration data analyzed by California’s Legislative Analyst’s Office.
Washington State’s experience is even cleaner. Jeff Bezos relocated to Florida shortly after the 2022 capital gains tax took effect and, as the Tax Foundation said , saved approximately US$1.1 billion on a single year of Amazon.com Inc. stock sales. France’s two-decade experiment with its wealth tax produced enough capital flight that even President Emmanuel Macron abolished it in 2018.
My practice has also seen departure files involving successful Canadians climb dramatically over the past decade. Public statistics are too blunt to capture the exodus, which is why I routinely invite Doubting Thomases — including a Liberal MP last week — to visit my office to see the work my colleagues and I are doing, confidentially, of course.
The California initiative may yet pass or be struck down. The Mamdani proposal may still be enacted. The Warren bill almost certainly will not. None of that is the point. Capital has already begun to move, and once it moves, it does not come back.
This should matter more to Canada than to anyone. Our productivity has flatlined for over a decade, our per-capita gross domestic product is falling and our top marginal personal tax rates exceed those in every U.S. state.
The capital fleeing California and New York is not headed for Toronto or Calgary; it is headed for Florida, Texas, Tennessee and other welcoming jurisdictions.
Wriston’s line was not a slogan; it was a description of behaviour. Canada has spent a decade telling capital it is unwelcome. Capital is listening.
Kim Moody, FCPA, FCA, TEP, is the founder of Moodys Tax/Moodys Private Client, a former chair of the Canadian Tax Foundation, former chair of the Society of Estate Practitioners (Canada) and has held many other leadership positions in the Canadian tax community. He can be reached at kgcm@kimgcmoody.com and his LinkedIn profile is https://www.linkedin.com/in/kimgcmoody.
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