The Fountain Gets It Right... Again

For the past few months we have been writing a series on Wealth Taxes entitled Eat The Rich.

Part one looked at Toronto’s “luxury” land transfer tax and how governments often reach for high-value assets to SEIZE when budgets become strained.

Part two examined Washington State and the push toward a new 9.9% income tax on those terrible millionaires - millionaire’s tax, raising the question of whether a state that built its reputation on being business friendly was about to change its personality.

Part three stepped back to Europe to reflect on Canada, where wealth taxes have been tried repeatedly and just as repeatedly failed, let net revenue, and abandoned once capital began to leave.

Then we sat down with economist David Macdonald to debate the issue directly. The disagreement wasn’t really about whether inequality exists. It was about incentives. What happens when policy collides with human behavior.

This week the story added another chapter we saw coming. The Millionaires leave and the government who fucked around, finds out, when the Government is left holding a much smaller bag.

We’ve had a few more subscribers who have gotten to 20 referrals and we’ve had the privilege of talking to them about their ventures. So if you know some people that would find value in our content and want to be in their good graces send this to them.

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Howard Schultz, the entrepreneur who built Starbucks from a Seattle coffee shop into a global company, is leaving Washington State after more than forty four years and relocating to Florida.

The timing matters.

Washington lawmakers are advancing a 9.9% tax on income over one million dollars, framed as a “millionaire’s tax” designed to raise billions for education and social programs. Supporters argue the tax is about fairness. Critics argue it risks changing the economic DNA of a state that spent decades attracting founders and investors precisely because it did not have an income tax.

Schultz did not publicly say the tax caused his move. But capital markets rarely wait for official explanations. They watch incentives.

Florida has no state income tax. And one of Washington’s most famous entrepreneurs is now heading there.

If this feels familiar, it is because we have seen versions of this story many times before.

In Sweden, the wealth tax pushed founders like Ingvar Kamprad of IKEA to relocate abroad for decades.

In France, thousands of millionaires left during the years of the ISF wealth tax, with economists estimating the government lost more revenue from departures than the tax ever produced.

More recently, Norway raised its wealth tax and saw dozens of billionaires relocate to Switzerland within a single year.

Each time the debate begins the same way. The tax targets a small group. The revenue projections look compelling. The political narrative frames the policy as fairness.

Then behavior enters the equation.

People move. Capital reallocates. Entrepreneurs incorporate somewhere else.

The visible loss is when someone leaves. The invisible loss is when someone decides never to arrive.

Young founders watching these debates do something governments rarely measure. They incorporate their next company in Delaware instead of Vancouver. They raise capital in Austin instead of Seattle. They build the next headquarters somewhere that does not treat success as a taxable event before the business has even matured.

That second category is harder to see. But over time it compounds.

None of this means taxation is inherently wrong.

Every society funds healthcare, infrastructure, education, and the rule of law through taxes. The question is not whether taxes exist.

The question is how systems respond to incentives.

Washington’s own numbers illustrate the stakes. The top one percent already contributes a significant share of the state’s total tax revenue through capital gains, sales taxes, and property taxes. Even a modest migration of high earners can shift the revenue base far more than policymakers expect.

When the most mobile segment of the economy begins reconsidering where to live, invest, and build, the calculus changes quickly.

When we began the Eat The Rich series, readers maybe thought the action - re-action was not so clear, but it is crystal clear to me, and now to others what will happen.

Today the evidence keeps arriving.

This does not prove every tax causes an exodus. But it reinforces a simple idea that policymakers ignore at their own risk.

Capital is mobile.
Talent is mobile.
Entrepreneurs are mobile.
Its in our DNA to get the best deal.

If the rules of the game change too dramatically, the players do not stay and argue about the scoreboard. Like we told Mayor Chow of Toronto - they leave the court and play where they are incentives to play. Learn or lose your most productive citizens.

They find a new league - and right now the league of Miami is lapping every other state. And judging by the flight paths lately, the scoreboard may not be the only thing moving. Governments let me save your the time and trouble - reduce your spend, become more efficient, and reduce taxes - this is the plan that works. See Florida as the best example - which by the way drumroll… is running a surplus with no state income tax, and is about to get rid of property taxes too. The turn style to Miami continue to whirl with Millionaires pushed out by their local governments.

What else are we paying attention too

International women’s day last week. Last night Autumn Durald Arkapaw became the first woman in 98 years to win best Cinematographer at the Oscars (and only three have been nominated in that time).

For those that don't know, the cinematographer is the director's right-hand person, using creative photographic talent to turn visions into art.

The new Women's Pro Baseball League (WPBL).

Amazing to see and our Family is going to catch some games this summer. Congratulations to all the amazing athletes who are going to get their chance to shine. Thank you to the league and wishing you a huge inaugural year.

Sam is a gangster - so when he share listen up. Some great tips from our Friend of the Fountain and give him a follow if you haven’t already.

Fountain Investor Corner

Berkshire Hathaway (BRK.A)

Greg says he is putting his whole salary into Berkshire ($25m) after tax approx. $15m annually. He also bought $68m a few years back of the stock. So incredible alignment with the CEO for shareholders. Atta Guy Greg - your not getting the Buffett love from the market yet - but I’m still in your corner.

CIRCLE (CRCL)

If you’ve been following out my investment in Circle (CRCL) the thesis and the DCA - dollar cost averaging - the last few weeks have been all Green. We were down right away, then we bought more (DCA), then we got to even and now it’s risen quite a bit. I am back in the Green and the lesson is to hold or sometimes double down if you believe in a company. Can’t be scared as an investor and hopefully a few of you didn’t buy when I did the first time, and caught the falling knife at the right time.