“It only takes a handful of successful people to leave to decimate the city’s tax base,” billionaire hedge fund manager Bill Ackman said to the Free Press on Wednesday. And he’s right.

A small but obscenely wealthy faction of New Yorkers are threatening to leave the city if Zohran Mamdani, the democratic socialist candidate for mayor, wins the race. Billionaire John Catsimatidis says he’ll go and take his supermarkets with him. Other rich people, like Neil Blumenthal and unnamed sources in finance and professional sports management, warn that others will leave too.

And the threat is real. Liberals often maintain that capitalism can co-exist with high taxes because any hit to the tax base by capital flight will inevitably be compensated for by the increase in revenue and economic growth, but while that happens on occasion, it’s far from an inevitability. In 2016, for example, hedge fund billionaire David Tepper caused a serious financial crisis for New Jersey when he left the state — and took billions in tax revenue with him. Politicians argued that it was the state’s high tax rate that chased him away. And capital flight has long plagued South and Central American countries; just last year, the persistent threat become so egregious in Nicaragua that president Daniel Ortega advanced a spate of legislation that (among other things) authorized the use of police force against corporate officers withholding financial information necessary to keep capital in the country.

So it’s not surprising to see the rich resort to the same tactics to keep Mamdani out of office. Still, there is a potential solution to this kind of problem: a state-level exit tax.

Exit taxes — taxes imposed on rich people who leave a given jurisdiction — have a grim reputation in the United States; but this is largely just because they are such an effective policy tool against the rich. And they are also well within the bounds of liberal orthodoxy: in 2020, for example, Elizabeth Warren proposed an exit tax of 40 percent “on the net worth above $50 million of any U.S. citizen who renounces their citizenship.”

Exit taxes at the state level would be more difficult to pull off since they would likely encounter constitutional objections, but these, Stetson University law professor Andrew Appleby argues, can be navigated:

If a state has a solid theoretical foundation and incorporates proper design principles . . . an exit tax can effectively mitigate tax base migration while aligning with prevailing policy goals and avoiding constitutional infirmities.

State-level exit taxes in the United States would also be useful as a way to prevent the “race to the bottom” of states competing for residency and investment by the rich by lowering their tax rates. As Thomas Piketty observes, something like this will ultimately have to be put in place if we are to maintain any tax system at all.

Though he is running close behind Andrew Cuomo, current polling suggests that unless something significant changes Zohran Mamdani is unlikely to win this election. Now is not the time for caution. Mamdani should announce that if elected, he will immediately work with the governor to implement a 40 percent exit tax on anyone with a net worth of more than $5 million. This will be a strong sign to voters that he is serious about taking the fight to the rich, and it will also help mainstream a long-neglected idea whose time has come.