February 10, 2021: According to legislators, Jeff Bezos would owe about $2 billion a year in state income taxes under Washington’s proposed wealth tax.
To reduce inequality and reduce the state’s lack of an income tax, Washington state legislators propose a 1% levy on wealth above $1 billion.
According to lawmakers, the tax would increase about $2.5 billion a year in revenue and would only apply to nontangible financial assets or financial investments like stocks.
According to the tax experts, the state wealth tax would be overreliant on Bezos, Bill Gates, MacKenzie Scott, and Steve Ballmer, the mega billionaires of Washington.
Jared Walczak of the Tax Foundation writes that 97% of the tax revenue would come from those four billionaires.
Bezos would owe about $2 billion a year under the new tax worth of about 200 billion dollars. Gates would owe about $1.3 billion whose worth 130 billion dollars; Ballmer would owe about $870 million, and Scott would owe about $600 million a year.
Walczak said any of these four mega billionaires could move to different states, setting it as their primary residence, and still spend up to 182 days a year in Washington state with avoiding the tax.
The wealth tax is needed to bring fairness to an unequal tax system in the country, said, proponents. Because it has no income tax and raises government revenue from sales tax, property taxes, and other taxes, low- and middle-income taxpayers pay a larger share of their income in state taxes.
Noel Frame, the state representative who introduced the bill, said the lowest earners pay 18% of their income in state taxes while the top 1% yield 6% of their state taxes income.
Orion Hindawi, co-founder, and CEO of Tanium, recently moved his family and his company to Washington from California. In a chat with the Washington Technology Industry Association, he said that the state would lose its competitiveness raised taxes on the wealthy.
Hindawi said workers and executives are no longer to one city or state with remote meetings and online productivity like they used to be. The wealth tax will be viewed as “vilification” by his peers.
“The reality of the situation is that people who are in Washington state have the flexibility they did not have the previous year, and that is persistent flexibility,” Hindawi said.
High earners and flexible workers are nation-states in their own right. They can move wherever they want, and it’s trivial.”
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