Californians Deserve Better Than Economic Fairy Tales: Editorial

California, like a careless heir who squanders a fortune, keeps menacing its top taxpayers. Unless lawmakers start showing some restraint, the state’s many economic strengths are likely to further erode.

An emblematic example is the recent campaign — orchestrated by a health-care workers union — to levy a supposedly one-time 5% wealth tax on the state’s billionaires. Proponents tout the measure as an “emergency” response to cuts in federal funding of health care, education and food assistance.

Problem is, the proposal would apply retroactively, adopt punitive valuation methods, and potentially force founders to liquidate shares or face bills that actually exceed ...