Why taxing the top 1% is a crap shoot

The Wall Street Journal this morning has an opinion piece (subscription required) that talks about why talk of “taxing the top 1%” is such a bad idea. They’re actually doing it in California, and it’s not working:

It looks like that Facebook IPO may not be enough to save California’s [fiscal house] after all. Facebook co-founder Eduardo Saverin has renounced his U.S. citizenship to move to Singapore, which has no capital gains tax. And now we learn the Golden State’s budget deficit will come in at $16 billion, up from a merely awful $9.2 billion estimate in January….

California Controller John Chiang reported last week that April tax collections were a gigantic 20.2%, or $2.44 billion, below 2012-13 budget projections….

Among the biggest surprises is a 21.5% or nearly $2 billion decline in personal income tax payments from what Governor Jerry Brown had anticipated….

Governor Brown and the public-employee unions are sponsoring a ballot initiative in November to raise the state sales tax by a quarter point to 7.5% and to raise the top marginal income-tax rate to 13.3% from 10.3%. This will make the state even more reliant on the fickle revenue streams provided by the rich.

Meanwhile, an analysis by Joseph Vranich, who studies migration of businesses from one state to another, finds that since 2009 the flight of businesses out of California “has increased fivefold due to high taxes and regulatory costs.”

This month Chief Executive magazine reports that its annual survey of CEOs ranked California dead last among the 50 states in business climate….