California Gov. Gavin Newsom has previously said that he does not support the "billionaire tax" measure. (Wally Skalij/Los Angeles Times/Getty Images)
Wayne Winegarden, a senior fellow in business and economics at the Pacific Research Institute, warned that the departure of even a few ultra-wealthy taxpayers can have lasting consequences.
"When one of those individuals leaves, that’s a significant and recurring hit to the tax base," Winegarden told Fox News Digital.
E.J. Antoni, chief economist at the Heritage Foundation, said the proposed wealth tax "has literally never worked anywhere," warning that capital flight erodes the tax base and shifts the burden onto those who remain.
"The tax base is collapsing, there’s no other way to put it," Antoni said.
CALIFORNIA WEALTH TAX PROPOSAL HEMORRHAGES $1T AS BILLIONAIRES FLEE
Texas has emerged as a clear winner in the shift toward lower-tax, less-regulated red states, while blue-state leaders grapple with the fiscal and political consequences of capital flight.
Between 2012 and 2022, California recorded a net loss of more than 361,000 residents to Texas, a shift that carried roughly $21 billion in taxable income with it.
Megan Mauro, interim president and CEO of the Texas Association of Business, said the Lone Star State has seen a surge of new residents from California.
"We have a light regulatory touch and no personal or corporate income tax," Mauro said, citing Texas’ recent $25 billion surplus as evidence of a different fiscal approach.
She warned the billionaire tax could leave California with fewer taxpayers and less revenue over time.
States with shrinking populations risk losing congressional representation, while expanding states gain influence. (J. Scott Applewhite/File/AP Images)
Analysts say the migration could reshape political power, affecting congressional representation and federal funding. States that lose population risk fewer seats in Congress, while faster-growing states can gain seats.
Shifts in population also influence how federal dollars for transportation, health care and education are allocated, since many funding formulas are tied to population size.
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"I think you absolutely get to a point where people are willing to vote differently," Winegarden said.
More broadly, Antoni said California could serve as a warning for other states weighing similar policies.
"California’s decline was not written in stone. It did not have to be this way," he said.
Amanda covers the intersection of business and politics for Fox News Digital.
https://www.foxnews.com/politics/california-capital-flight-mirrors-new-york-hands-red-states-windfall