In 1982, France introduced a wealth tax so mild it was almost polite. A fraction of a percent, aimed only at the very top.

Within a generation, economists estimate, tens of thousands of France’s wealthiest households had quietly relocated to Belgium, Switzerland, and the UK.

The tax raised less revenue than expected.

And the country lost something harder to measure: the people, the businesses they ran, the jobs those businesses created.

France eventually repealed it. Belgium, for a while, thanked France for the talent.

Now, 44 years later… is California about to run the same experiment?

This November, voters will decide on Proposition 40: A one-time 5% tax on the wealth of state residents worth more than a billion dollars, retroactive to the first of this year.

It’s already had a “France effect.” Reports from Fortune in March found that six billionaires have left California ahead of the measure, taking with them, by that outlet’s estimate, some $27 billion in wealth that might otherwise have been taxed.

Only around 200 households statewide will be affected.

When it started, the U.S. income tax in 1913 only applied to about 1% of Americans. Everyone else shrugged at the time… and you know how that turned out.

What’s more, other states are watching how November goes. Maine, Massachusetts, New Jersey, and Washington have already moved to tax high earners more aggressively, at thresholds far lower than a billion dollars.

Prop 40 champion Ro Khanna calls California “the test case for the nation.”

So if you’re the kind of reader who’s spent decades building something, a business, a portfolio, a home that’s finally paid off, then the machinery going up in Sacramento this fall could be worth watching.

Before launching Socha Capital Wealth Strategies, WorthNet Partner Adviser Jeff Socha spent five years lobbying Congress on tax policy, giving him a firsthand look at how legislation gets written—and how it ultimately plays out in practice. Today, he helps business owners navigate the tax laws that result.

“Many of the people I talk with treat this as a California problem,” Jeff said. “They compartmentalize it. If they’re in Texas, they’ll say there’s no way it happens there. New York, Illinois, Minnesota, maybe. But outside a handful of deep-blue states, people don’t think it’s coming for them.”

Jeff himself isn’t losing sleep over it. Not because he takes it lightly, but because of how it’s built:

“A lot of what my clients own is subjective value,” he said. “What’s a business worth? What’s real estate worth? What’s a stake in a private company worth today versus what someone would actually pay for it? Wealth like that doesn’t sit in a bank account where you can pull up a number to the penny.”

That matters a lot when it comes to enforcement.

A tax on income is straightforward to calculate: a paycheck has a number on it.

But a tax on wealth means someone, somewhere, has to put a price tag on things that don’t trade hands often enough to have one. A private company… a stake in a family business… land that hasn’t sold in a generation…

Who does that pricing, and how it gets challenged, is where a law on paper turns into a law in practice.

“Congress writes tax law, and it’s rarely airtight. Then a taxing authority, the IRS federally or a state’s revenue department, has to interpret it and build enforcement around it. That gap is where planning happens. Lawmakers write the law. The people in private practice are the ones who help clients navigate it once it’s real.”

He added a wrinkle worth sitting with if you already live in a high-tax state:

“If you’re paying California’s 13.3% top rate, or stacking city tax on top of state tax the way New Yorkers do, you’re already staffed up for a demanding relationship with your state’s tax code. A wealth tax makes it heavier. It doesn’t make it new.”

Whether Proposition 40 ultimately passes or not, Socha believes the larger lesson is the same—

Tax laws change. Good planning changes with them…

“Trying to guess what a legislature will do next is a lot like trying to time the market. It’s not something you do reliably. Instead, you plan with the laws that exist today, and you adjust when the laws change. Anything more is wasted energy.”

Successful planning’s always the goal. WorthNet exists to connect self-directed investors with experienced financial advisers who understand the kind of planning we write about.

If Jeff’s approach to navigating tax law resonates with you, click below and take our short questionnaire to see if you’re a match with a pre-vetted adviser in our small, invitation-only network, including Jeff and his team at Socha Capital Wealth Strategies.

And because you’re an independent-minded financial newsletter reader, we believe you’ll want to know the honest, no-BS truth about how we work:

WorthNet has a financial relationship with the advisers in our select network, including Socha Capital Wealth Strategies, and may receive compensation in connection with introductions made to the firm. Jeff Socha’s editorial views are his own and are independent of that relationship. Nothing here constitutes personalized investment, tax, legal, or financial planning advice. We’re just here to connect self-directed investors with the advisers we’ve carefully selected.

Jeff E. Socha

CEO & Founder of Socha Capital Wealth Strategies

Tax Innovator, Financial Strategist

Jeff E. Socha is a financial strategist with over 15 years of experience helping high-net-worth individuals and business owners navigate complex tax laws and design tailored wealth strategies. He is the founder of Socha Capital Wealth Strategies (CRD #317553), a proud member of the WorthNet partner adviser network.

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Last Revised: September 2, 2026