"They'll Flee" — The Billionaire Protection Racket

Responding to: California’s Democratic Civil War Over the Wealth Tax — The Editorial Board · 2026-06-19

What the Piece Argues

The Wall Street Journal’s editorial board argues that a California ballot initiative proposing a 5% wealth tax on billionaires — sponsored by the SEIU-United Healthcare Workers West — is less a serious revenue policy than a “shakedown” by a union that has historically used the initiative process to extract concessions from healthcare providers. The piece contends the tax would accelerate wealth flight from California, citing estimates from the Tax Foundation and Hoover Institution that the state has already lost $777 billion in wealth to outmigration and that the tax would cost $25 billion in revenue over time. The editorial frames the broader episode as a “Democratic civil war” in which Governor Newsom, healthcare unions, and government labor groups are fighting over an ever-expanding pot of tax revenue — with Newsom trying to negotiate the initiative off the ballot to protect his presidential ambitions — and concludes that Democrats should “run a full-throated campaign against the wealth tax” rather than continue paying “union ransom.”

Receipts

The editorial frames a tax on roughly 246 billionaires as a self-defeating threat to the economy — and buries the question of who actually benefits from keeping that money where it is.

• The framing wants you to believe that a 5% wealth tax on California’s billionaires will cause them to flee, destroying the state’s tax base; that the Medicaid funding crisis driving the initiative is fabricated (“federal Medicaid is projected to continue growing”); and that the real story is unions “extorting” Democrats and taxpayers for higher spending.

• What’s really going on:

  • California’s roughly 246 billionaires hold a combined net worth exceeding $2 trillion — untaxed at the state level beyond income and property — while depending on publicly funded roads, courts, ports, universities, and an educated workforce to generate that wealth. A 5% wealth tax would yield approximately $100 billion gross. The piece calls this a “con.” It does not name the two trillion.
  • The wealth-flight claim is the editorial’s load-bearing argument, and the most rigorous research on the subject — Cristobal Young’s peer-reviewed work on millionaire migration using IRS tax data — finds the flight effect is far smaller than commonly believed, with near-zero long-run migration elasticities among the wealthy. California has added billionaires over the past decade, not lost them.
  • The piece says federal Medicaid is merely growing “at a slower rate.” The CBO scored the GOP reconciliation bill as reducing Medicaid spending by approximately $800 billion over ten years, with millions projected to lose coverage. Calling a deceleration of funding “growth” is the editorial’s central euphemism.

The DEFCON Ladder

DEFCON 5 — Polite Reframe

When to use: a family member or colleague who reads the WSJ and considers it authoritative, or a mixed-faith audience that respects fiscal caution but hasn’t examined the numbers behind the claim.

The Wall Street Journal’s editorial board published a piece last week arguing that California shouldn’t tax its billionaires because they’d leave. It’s worth taking that claim seriously — if it were true, the policy would be self-defeating. But the most rigorous research available tells a different story.

Cristobal Young, whose peer-reviewed work on millionaire migration is the most comprehensive dataset on the subject, found that wealthy Americans are far less mobile than commonly believed. His analysis of IRS tax data shows near-zero long-run migration elasticity — meaning the flight effect from high-end state taxes is real but modest, a fraction of what the editorial implies. California has not been emptied of its wealthy. It has added billionaires over the past decade. It remains the world’s fifth-largest economy.

The editorial also frames the Medicaid funding concern as manufactured — noting that federal Medicaid is growing “at a slower rate.” But the Congressional Budget Office, Congress’s own nonpartisan scorekeeper, projects the GOP reconciliation bill will reduce Medicaid spending by roughly $800 billion over ten years, with millions losing coverage. A slower rate of growth, when the need is increasing, is a cut in every way that matters to the people who depend on it.

Here is what the piece does not examine: who benefits from the current arrangement. California’s roughly 246 billionaires hold a combined net worth exceeding two trillion dollars. They use infrastructure, courts, ports, and a publicly educated workforce to generate that wealth. The question isn’t whether asking them to contribute 5% will cause them to flee — the research says it won’t. The question is why, every time a revenue proposal comes up, we are told that the people with the most cannot be asked to contribute at all.

DEFCON 4 — Firm Moral Superiority

When to use: an op-ed comment section, a Substack reply, a letter to the editor — audiences who expect analytical substance and won’t be moved by mockery alone.

The Wall Street Journal editorial board wants you to believe that taxing California’s billionaires is a “con” and a “shakedown.” Let us be precise about who is running the con.

The piece’s wealth-flight claim rests on two sources. The first is Jared Walczak of the Tax Foundation — an organization historically funded by corporate interests to oppose progressive taxation. The second is Joshua Rauh of the Hoover Institution — a conservative think tank founded with Herbert Hoover’s money and housed at Stanford to advance free-market ideology. Neither is a disinterested source. Both have institutional commitments to the conclusion they reach.

Against them stands Cristobal Young’s peer-reviewed research — the most comprehensive study of millionaire migration ever conducted, built on IRS microdata covering the full population of top earners — which found that the actual flight effect of high-end state taxes is negligible. The revenue gained from taxing those who remain dwarfs the income lost from those who don’t. California has not lost its wealthy. It has been enriched by them, even as they pay the highest state income taxes in the nation.

The editorial then dismisses the Medicaid crisis as manufactured, noting that federal Medicaid is “projected to continue growing.” The CBO scored the reconciliation bill at roughly $800 billion in Medicaid reductions over ten years. Calling that growth because the line doesn’t go to zero is like calling a pay cut a raise because your employer didn’t fire you entirely. Newsom’s $28 billion state-level projection is a straightforward application of federal scoring to California’s Medicaid population. The math is the math.

What the editorial protects — and never names — is the current structure in which California’s roughly 246 billionaires hold a combined net worth exceeding two trillion dollars, untaxed at the state level beyond property and income, while depending on publicly funded infrastructure to generate and protect that wealth. The piece calls the wealth tax a “con.” The con is telling working Californians, every time a revenue question comes up, that the people with the money cannot be asked to contribute — because they’ll leave. The Journal has been telling this story for forty years. The billionaires are still here. The roads they drive on were paved with public money. The courts that enforce their contracts are publicly funded. The question is not whether they’ll flee. The question is why this particular fairy tale gets retold by this particular editorial board, on behalf of this particular class, every single time.

DEFCON 3 — Mockery and Ridicule

When to use: Twitter, a social media thread, a comment section where humor carries further than sermons — performing for bystanders who need to see the gap between the framing and the reality.

The Wall Street Journal editorial board — owned by Dow Jones, which is owned by News Corp, which is owned by the Murdoch family — published a piece last week explaining why California shouldn’t tax its billionaires. “They’ll flee,” the board warned, gravely. “The tax base will erode.”

Let’s check the math. California has roughly 246 billionaires. Combined net worth: over two trillion dollars. A 5% tax would yield approximately $100 billion a year in gross revenue. And the Journal’s evidence that this would cause mass flight? Two researchers — one from the Tax Foundation (funded by the corporations that would pay the tax) and one from the Hoover Institution (founded by a Republican president, housed at Stanford, dedicated to the proposition that rich people shouldn’t be taxed). Against them: Cristobal Young’s peer-reviewed IRS-data study showing near-zero long-run migration elasticity among millionaires. But sure — the sky is definitely falling this time.

The piece also assures us Medicaid isn’t being cut. Federal spending is merely growing “at a slower rate.” Translation: your landlord isn’t raising your rent; he’s just increasing it more slowly than you expected. The CBO says the reconciliation bill cuts $800 billion from Medicaid over ten years. But if you close your eyes and whisper “slower rate” three times, it almost sounds like good news.

And the real villains in this story, according to the Journal? Healthcare workers. The SEIU — the union representing the people who change your grandmother’s sheets and hold your kid’s hand in the emergency room — is “extorting” the state by proposing that people with two thousand million dollars contribute 5% of it to fund the programs that keep those healthcare workers employed. The editorial board, writing from the News Corp building, finds this outrageous. The billionaire class cannot be asked to pay. The people who provide care to the sick are the extortionists. This is the moral universe the Journal inhabits, and it is inviting you to move in. The rent, presumably, will grow at a slower rate.

DEFCON 2 — Aggressive Villainization

When to use: a hostile thread, a debate where the other side is operating in bad faith, an audience that needs the machinery named and the mirror held up.

The Wall Street Journal editorial board published a piece last week that can be summarized in one sentence: Don’t tax the billionaires — they’ll leave. This is the argument the ownership class has made against every revenue measure since the income tax was invented. It was wrong then. It is wrong now. And the people making it know it is wrong, which is why they keep citing the same two researchers from the same two institutions funded by the same class of people who benefit from the conclusion.

Here is what the editorial does not tell you. California’s roughly 246 billionaires hold a combined net worth exceeding two trillion dollars. They benefit from publicly funded roads, ports, courts, police, fire departments, educated workforces, and federally funded research that their companies consume. A 5% wealth tax would yield approximately $100 billion annually in gross revenue — and the piece calls this a “con.” Not the two trillion dollars sitting untaxed. Not the public infrastructure those billionaires ride for free. The tax is the con.

The editorial assures you Medicaid isn’t being cut. Federal spending is growing “at a slower rate.” The CBO — Congress’s own nonpartisan scorekeeper — scored the reconciliation bill at $800 billion in Medicaid reductions over ten years. Millions losing coverage. But the Journal says “slower rate,” and you’re supposed to feel fine about it.

And who is the villain in this telling? Not the billionaires. Not the editorial board protecting them. The villain is the SEIU — the union representing healthcare workers — for having the audacity to suggest that people with two thousand million dollars might spare 5% of it to fund the programs that employ the people who keep the state’s hospitals running. The piece calls this “extortion.” It calls the democratic initiative process a “shakedown.” It calls the negotiation a “bribe.”

You know what extortion actually looks like? It looks like a class of people holding two trillion dollars in wealth, consuming publicly funded services to generate that wealth, and then paying an editorial board to tell the public that asking them to contribute is theft. That is the racket. That is the protection scheme. And the Journal is not reporting on it. It is running it.

DEFCON 1 — Nuclear Satire

When to use: the audience that has heard every polite version and still isn’t registering the scale of the con — the moment where the absurdity of the framing demands grotesque illustration and full villainization of the ideas and institutions, not the persons.

The Wall Street Journal editorial board — the in-house opinion page of the Dow Jones Company, a subsidiary of News Corp, controlled by the Murdoch family, a dynasty whose patriarch built a media empire specifically to advance the political interests of concentrated capital — wants you to know that taxing California’s billionaires is a “con.”

Roughly two hundred and forty-six people in California hold a combined net worth exceeding the GDP of most nations on Earth. They use roads their taxes didn’t build, courts their fees didn’t fund, ports their contributions didn’t construct, and workforces their companies didn’t educate. They have accumulated this wealth in a state that provided the infrastructure, the legal system, the research universities, and the consumer market that made the accumulation possible. And the Journal says asking them to contribute 5% of their net worth — which would yield approximately $100 billion annually in gross revenue — is a “shakedown.”

The evidence that this will cause catastrophic flight? Two researchers. One from the Tax Foundation — whose funding history reads like a donor list for the people who would pay the tax. One from the Hoover Institution — which was literally founded to promote the worldview of a Republican president who believed government should serve business first. Against them: Cristobal Young’s peer-reviewed analysis of IRS microdata, the most comprehensive research on the subject ever conducted, showing the flight effect is negligible. Near-zero long-run migration elasticity. But the Journal chose the two researchers whose conclusions protect the people who own the Journal. Curious, that.

Medicaid isn’t being cut, the editorial assures us. It’s just growing “at a slower rate.” The CBO says $800 billion less over ten years, millions losing coverage. The Journal says “slower rate.” This is the editorial equivalent of a man shoving you off a building and telling you, on the way down, that gravity is merely operating at a reduced velocity.

The villain in this story is not the billionaire class sitting on two trillion dollars. It is the SEIU — the union of the people who take care of the sick — for proposing that the trillion-dollar class might spare 5% for the programs that employ them. The Journal calls this “extortion.” It calls the democratic initiative process a “shakedown.” It calls the negotiation a “bribe.”

Here is what the editorial board will never write: the word “enough.” There is no amount of wealth accumulation sufficient to justify asking for a contribution. There is no public crisis severe enough. There is no level of infrastructure decay, no number of uninsured Californians, no depth of healthcare worker poverty that will produce, from this editorial board, the sentence: “Perhaps the people with two trillion dollars should help.” The answer is always: they’ll leave. The answer is always: it will cost more than it raises. The answer is always: the real villains are the people who care for the sick and teach the children.

Two hundred and forty-six people with more money than most countries. And the Journal’s position is that asking them to contribute to the state that made them is a crime against liberty. If this is the free market the Journal champions, then the free market is a protection racket with a subscription price.

DEFCON 1+ — Prophetic Indictment

When to use: the reader moved by moral authority with an edge — the audience that hears Amos and Jeremiah and recognizes that the indictment is older than any editorial board, older than any tax code, older than any republic.

The prophet Amos saw it twenty-seven centuries ago: they sell the righteous for silver and the needy for a pair of sandals. He was not speaking metaphorically. He was describing a governing class that converted the suffering of the poor into a line item on a balance sheet and called it governance. The Wall Street Journal editorial board has updated the sandals. The conversion rate is higher. The operation is the same.

In California, roughly two hundred and forty-six human beings hold a combined net worth exceeding two trillion dollars. They did not build the roads they ship their goods on. They did not fund the courts that enforce their contracts. They did not educate the engineers who write their code or the researchers whose discoveries their companies commercialized. The public did. The public funded it. The public maintains it. And when the public — through the democratic process of a citizen initiative — proposes that the people who have benefited most from that public investment contribute 5% of their wealth to sustain it, the Journal calls it a “con.” A “shakedown.” An act of “extortion.”

Isaiah warned of those who turn judgment into wormwood. The judgment here is the democratic initiative itself — the mechanism by which the people without concentrated power propose what the people with concentrated power would rather not do. The Journal does not oppose the wealth tax on the merits alone. It opposes the premise: that the people who work the hospitals and teach the children and pave the roads might, through the ballot, ask the people who own the buildings to help pay for them. That is the wormwood. That is the corruption the prophet named — not of the tax code, but of the moral vocabulary required to discuss it.

The piece says Medicaid isn’t being cut. The CBO — the nonpartisan scorekeeper of the Congress the Journal’s owners spend millions to influence — says $800 billion over ten years. But the editorial says “at a slower rate,” and expects you to accept that a deceleration of catastrophe is the same as the absence of harm. This is what the prophet Jeremiah diagnosed as the unblushing face — a governing class that has lost the capacity to be ashamed of what it says in public. They have acquired, as the text has it, the condition where they no longer know how to blush.

The editorial does not name what it protects. It does not say: “We represent the interests of a class that holds two trillion dollars in a single state, and we believe they should keep it.” It says “freedom.” It says “free markets.” It cites the principles of 1776 — Thomas Jefferson and Adam Smith — as if Jefferson wrote the Declaration so that two hundred and forty-six Californians could hoard two trillion dollars while the hospitals that serve the poor lose funding. As if Adam Smith — who warned repeatedly, across three books, against the tendency of merchants and manufacturers to conspire against the public interest — would recognize this editorial as anything other than the exact conspiracy he spent his career describing.

The prophet’s question is the question it has always been: who benefits, and who pays? The Journal has answered. The billionaires should benefit. The public should pay. And anyone who proposes otherwise is running a “con.” This is not new. It is the oldest transaction in the political economy of every unequal society that has ever existed. The editorial board merely gave it a subscription model and a masthead.

DEFCON 1++ — Profane Scorched-Earth

When to use: the full cathartic release — the reader who has tried the polite version, the firm version, the mockery, and needs the gloves all the way off, every expletive earned by the receipts that precede it, every reservation incinerated.

The Wall Street Journal editorial board — a committee of professional rich-people advocates employed by a Rupert Murdoch subsidiary — spent twelve hundred words last week telling you that taxing billionaires is a “con.” Let’s talk about who is actually running the con.

California has roughly 246 billionaires. Combined net worth: over two trillion fucking dollars. Two trillion. That is more than the GDP of Saudi Arabia. These people live in a state that built them roads, ports, courts, universities, a legal system that protects their patents and enforces their contracts, a consumer market of 39 million people, and a workforce educated at public expense. And when someone proposes they pay 5% — five goddamn percent — of their net worth to help fund the healthcare system that keeps the people who serve them alive, the Journal’s editorial board calls it “extortion.”

Extortion. The people who change bedpans in understaffed hospitals for $25 an hour are the extortionists. Not the two hundred and forty-six people sitting on two trillion dollars while the state’s Medicaid system faces the largest federal funding reduction in its history. Not the Murdoch family, whose media empire exists for the specific purpose of telling the public that asking the rich to contribute is theft. The healthcare workers. They’re the problem.

Fuck that.

The piece’s “evidence” that wealth taxes cause flight? Two researchers. One from the Tax Foundation — an organization funded by the same corporations that would pay the tax. One from the Hoover Institution — a right-wing think tank named after a president who thought the market would fix the Great Depression on its own. Against them: Cristobal Young’s peer-reviewed IRS-data study, the most comprehensive research on the subject ever conducted, showing near-zero long-run migration elasticity among the wealthy. The flight effect is a rounding error. The Journal chose the two researchers whose conclusions protect the people who own the Journal. This is not journalism. This is a goddamn service contract with a byline.

And the Medicaid claim — the piece says federal Medicaid is growing “at a slower rate,” as if that’s not a cut. The CBO says your grandmother’s nursing home gets defunded and ten million people lose coverage, but the Journal says “slower growth” — the kind of linguistic horseshit the Journal pulls every time the numbers don’t work in their favor: rename the thing, reframe the damage, and hope you’re too busy working three jobs to read the footnotes.

The editorial doesn’t name what it protects. It never says: “We believe two hundred and forty-six people should hold two trillion dollars in concentrated wealth untaxed while the state that generated that wealth crumbles around them.” It says “freedom.” It says “free markets.” It cites Thomas Jefferson and Adam Smith — as if Jefferson intended the Declaration of Independence to serve as a tax shelter for billionaires, and as if Adam Smith, who spent The Wealth of Nations warning that merchants will always conspire against the public interest, would recognize this editorial as anything other than the exact conspiracy he described.

Here is what the Journal will not print: the word “enough.” There is no amount. There is no level of public suffering sufficient to cause this editorial board to write the sentence: “Maybe the people with two trillion dollars should help pay for the state they live in.” The answer is always: they’ll leave. The answer is always: it’ll cost more than it raises. The answer is always: the real villains are the people who care for the sick and teach the children and mop the floors. Every. Single. Fucking. Time.

Two hundred and forty-six people. Two trillion dollars. And the Journal’s position is that asking them to contribute is a crime against liberty. The prophet Amos saw this twenty-seven hundred years ago: they sell the needy for a pair of sandals and trample the poor into the dust. The sandals have gotten more expensive. The trampling hasn’t changed. And the editorial board is still writing press releases for the people doing the trampling.

This is not a “Democratic civil war.” This is not a “union shakedown.” This is a class of people with more money than nations telling the rest of us, through their paid editorial board, that we should be grateful they haven’t left yet. The con is not the tax. The con is the editorial. The con is the idea that two trillion dollars in concentrated wealth is natural and a 5% contribution is theft. The con is every word of this piece, written by people who will never need Medicaid, will never work for $25 an hour, will never sit in an understaffed emergency room wondering if their kid will be seen — telling the people who do all of those things that they are the ones running the scam.

They are not running the scam. They ARE the scam. And the Journal is their goddamn newsletter.

The Deeper Breakdown

Who benefits from the framing, and by what mechanism

The primary beneficiaries of the “don’t tax billionaires — they’ll leave” narrative are California’s roughly 246 billionaires, whose combined net worth exceeds $2 trillion. A 5% annual wealth tax would yield approximately $100 billion in gross revenue annually — currently unrealized while that class benefits from publicly funded infrastructure, courts, and an educated workforce. The Wall Street Journal’s editorial page, owned by Dow Jones (a News Corp subsidiary, controlled by the Murdoch family), has institutional interests aligned with concentrated capital: the Murdoch empire’s political and commercial interests are served by a policy environment in which progressive taxation is treated as self-defeating.

The mechanism is a reliable one: frame the tax as futile (they’ll flee), frame the proponents as corrupt (unions are “extorting”), and frame the status quo as natural (free markets, freedom, 1776). The editorial performs this operation by citing two researchers whose institutional homes — the Tax Foundation and the Hoover Institution — have documented histories of opposing progressive taxation on behalf of corporate and wealthy donors.