Week in Insights: Canada’s Exit Tax Debate Is a Hint for States

As California, New York, and Washington state flirt with or pass higher taxes on millionaires and billionaires, a common objection resurfaces: If you tax the rich, they’ll just leave.

This debate has defined state tax policy for years. But as an exit tax proposal in Canada begins to circulate, maybe more states should consider whether they should first tax the rich’s ability to leave.

The argument against higher state taxes in the US is straightforward and facially plausible. High earners in the US can shift their income and residency across state lines with relative ease. By that ...