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California has the highest income taxes in the nation. So why is it tens of billions of dollars in the red?Here is the trap Gavin Newsom built for himself.The state leans on a tiny group of wealthy people to pay the bills. The top 1 percent of earners cover roughly 40 percent of California's personal income tax. When the stock market dips, or when a few billionaires pack up and leave, the whole budget shakes.And they are leaving. Between 2020 and 2021, California saw more than 27,000 fewer tax returns from people earning $200,000 or more. A Stanford study of the 2012 Prop 30 tax hike found that raising rates on top earners erased nearly half the expected new money in the first year alone.Now the progressive wing wants to go further with a new tax aimed straight at billionaires. Even Newsom knows the math is bad. He opposes it. He needs the rich to fund his programs and bankroll his future, yet his own party keeps reaching for the one move that sends them running to Texas and Florida.That is the quagmire. You cannot soak the rich and keep the rich. You cannot fund endless spending on the backs of the very people you chase out the door.Alexander Hamilton saw this in 1787. In Federalist No. 21 he warned that taxes pushed too high "lessen the consumption" and shrink the money that ever reaches the treasury. Tax too hard and you collect less, not more.Brutus, writing for the Anti-Federalists, called the power to tax "the great engine of oppression and tyranny in a bad" government.Both warnings are playing out in Sacramento right now.And the lesson for the rest of us is simple, and it is hopeful. Freedom works. Low taxes work. People and their dollars flow toward states that respect both.