By Reagan Steele – Business & Economic Policy Writer

Bernie Sanders arrived in Los Angeles this week and delivered a fiery speech accusing billionaires of greed and moral decay. The crowd cheered. The signs waved. The message was clear. Sanders framed California’s proposed wealth tax as a moral battle that would finally force the ultra-wealthy to “pay their fair share.” The rhetoric was loud. The energy was strong. The evidence tells a different story. Wealth taxes do not work. They do not stabilize government revenue. They do not strengthen the economic base they target. They drive capital out of the jurisdictions that impose them. The clearest modern example is Norway.

Norway expected to bring in an additional $146 million per year by raising its wealth tax. Instead, according to independent financial analysis, the policy triggered an exodus of high net worth residents whose combined wealth was estimated at $54 billion. That outflow erased the projected gain and replaced it with a projected $594 million yearly revenue loss. The net impact was a negative swing of $448 million. The Brussels Report study confirms the mechanism behind the numbers. Wealth taxes in Norway fall on working capital regardless of income. Companies must liquidate assets to meet the tax. This weakens investment, strains smaller enterprises, and encourages relocation. When enough entrepreneurs and investors leave, the tax base collapses.

California is showing the same signals before the tax is even on the ballot. Newsweek reporting shows that high income Californians are already moving their interest and attention to Nevada. Realtor.com data cited in the report found that more than 23 percent of Las Vegas listing views now come from Los Angeles residents. Eight percent come from San Jose. The proposed California wealth tax would apply retroactively to anyone residing in the state at the start of 2026. That message alone is enough to accelerate departures. Retroactivity signals that the rules can change at any time. Stability matters to investors. Predictability matters to founders. No income tax in Nevada provides both. California provides neither under this proposal.

Sanders cast the measure as a moral confrontation with inequality. Politico’s reporting shows that he attacked individual billionaires by name and urged voters to take a stand against concentrated wealth. Strong language does not change the mathematical reality. Norway lost revenue. France lost revenue. Sweden lost revenue. Every country that has implemented a wealth tax has eventually abandoned it because the economic damage outweighed the ideological appeal. The problem is structural. A tax on assets forces the liquidation of productive capital. It reduces investment. It weakens business growth. It drives high earners to other jurisdictions. The Brussels Report analysis notes that Norway is still dealing with the consequences and that its government relied on political rhetoric instead of addressing the loss of capital and the strain on small enterprises.

California is at the beginning of that same process. Sanders brought applause to the Wiltern Theatre. He did not bring data that contradicts the global record. The facts are consistent. Wealth taxes shrink the tax base. They increase volatility. They reduce the revenue necessary to sustain public services. They encourage the very people who fund the majority of the state’s budget to leave.

Voters can support the goal of addressing inequality without accepting policies that have a documented record of failure. Evidence must come before emotion. California has the opportunity to avoid the mistake Norway made. The cost of ignoring that evidence would be borne for years.