Progressive lawmakers at the state level have crafted a panoply of clever, and often odious, schemes to confiscate wealth from their citizens over the years. Whether to plug gaping budget deficits or raise money for unnecessary projects, blue states are doing the opposite of their red counterparts. As a result, households are voting with their feet, getting out of dodge, and taking their money with them. But several states may slap them with one more tax bill.
Exit Taxes Coming Soon
Liberty Nation News has documented the blue-state exodus over the past few years. New York Governor Kathy Hochul (D), for example, had the temerity a few years ago to tell affluent Republicans to get out of her state. Well, they heeded her advice and left for places where they can keep more of their money with a lower cost of living.
As a result, various Democratic-run states are losing billions of dollars each year just from individuals fleeing these states. Their solution? Either begging and pleading for everyone to come back or seeking vengeance on those who have thought above absquatulating.
California, Connecticut, Massachusetts, Michigan, New York, and Washington State are among the states exploring or already implementing exit‑tax‑style measures as high earners relocate.
The Golden State is the most prominent example, applying a one-time 5% tax on net worth over $1 billion. Unsurprisingly, scores of wealthy folks have declared they are waving goodbye to Newsom Nation. Interestingly enough, California once considered imposing a penalty on those who abandoned the state, but the proposal’s constitutionality proved too much to bear. This is the next best thing.
Since 2024, the Empire State has openly discussed exit taxes due to a shrinking population. Some policymakers have floated ideas to tax the unrealized gains of high‑net‑worth individuals who relocate, which functions similarly to an exit‑tax concept even if it isn’t labeled as one.
If the Evergreen State was already witnessing a flood of rich people fleeing, its millionaire’s tax has accelerated the trend. Local reports indicate that high-end home listings have rocketed. Connecticut has had a mansion levy for the last couple of years, also known as a conveyance tax of up to 2.75% on home sellers who sell their luxury residence and move to another state.
Appetite in Washington
The United States has seen more than 10,000 Americans formally renounce their citizenship since 2021, according to IRS data. While not on par with states, the numbers have risen in recent years.
In March, Sen. Elizabeth Warren (D‑MA) introduced the Ultra‑Millionaire Tax Act, which would impose a 40% exit tax on individuals with a net worth exceeding $50 million. The broader plan would also enact a 2% annual tax on wealth above $50 million, plus an additional 1% tax on billionaires. Essentially, those trying to expatriate would face a significant 40% tax on their assets.
Warren estimates the scheme would raise more than $6 trillion over ten years. It has modest support in Washington, with 49 congressional co-sponsors and dozens of unions, advocacy groups, and national organizations.
“The Ultra-Millionaire Tax Act is a major step toward making sure the wealthy finally pay their fair share,” said Rep. Pramila Jayapal (D-WA) in a March 26 statement. “With this legislation, we can narrow the racial wealth gap and invest trillions of dollars in health care, schools, clean energy, housing, and more to improve lives in communities across America.”
Will it go anywhere on Capitol Hill? Unlikely. But it does show an appetite among many lawmakers, who are already collecting record revenue, to use every means necessary to extract wealth from job creators, business owners, and contributors to society.
Band-Aid Solution
Countries, primarily in Europe, have instituted exit taxes. The data show that places like France, Germany, and Norway are successful in generating revenue from these confiscatory efforts. At the same time, they do not reverse the long-term trend of people leaving for destinations with lower tax rates and better employment or business opportunities. Exit taxes are a short-term fix rather than a permanent solution.
