While most people were trying to file their taxes last month, Senator Elizabeth Warren was busy trying to raise them.  Her reintroduced Ultra-Millionaire Tax Act of 2026 would impose a 2-percent annual levy on individual net worth above $50 million, a 3-percent rate on billionaires, and generate what its proponents claim will be over $6 trillion. That estimate is the economist equivalent of drawing blood from a stone – it doesn’t exist and it shouldn’t be taken seriously.

Warren’s latest proposal also includes a 40 percent “exit tax” on the net worth of any American worth more than $50 million …

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In economics, the “Greater Fool” theory holds that investors buy overpriced assets expecting others will pay more for them later. So a stock or real estate bubble will continue until the proverbial “last fool” jumps in, at which point there’s nobody left to keep the bubble going and it bursts.

We need an analogous theory for tax policy these days. States like California, New York, and Washington continue to raise taxes and otherwise create an environment that is hostile to investment and entrepreneurship. The result has been an unprecedented flight of taxpayers and capital out of those states:

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