Have you heard of the proposed wealth tax in Washington? State legislators are proposing a 1% tax on assets of more than $ 1 billion, in an effort to address a state income tax shortfall and reduce inequality. This would increase the state’s revenue by about $ 2.5 billion annually. Additionally, it will only apply to unconnected financial assets such as investments, stocks or options. As you can imagine, the state’s mega billionaire will bear the brunt of it and it will fall largely on the backs of four people: Jeff Bezos, McKenzie Scott, Bill Gates and Steve Ballmer. The entire 97% of the proposed 97% of the money will come from those four billionaires.
Jeff Bezos will be on the hook for $ 2 billion per year, with his ex-wife McKenzie Scott owed $ 600,000 per year. Gates would have to pay $ 1.3 billion per year. Ballmer would be owed $ 870,000 annually. Of course, none of those four people have a day-to-day role that they don’t need to go to an office, so they might just move to another state to avoid tax. Tax experts calculating the $ 2.5 billion annual tax will take one or more steps, because if you would be responsible for paying $ 4.8 billion for Bezos, Scott, Gates and Ballmer in total, it would be $ 2.5 billion. Will be more.
Any of these four billionaires can move to another state, call it their primary residence, and still spend up to 182 days a year in Washington to avoid tax. Ballmer, as we all know, owns the NBA’s Los Angeles Clippers, and can easily decide to call Los Angeles his primary home – although real estate in Golden State doesn’t come cheap, he can buy it . Bezos also maintains a la Ghar. Apparently, all four are rich enough to go wherever they want and also rich enough to have advisors around them telling them what is smart and money saving. In other words, Washington State should not count those billions, unless they have.
Wealth tax payers argue that the most unequal tax system in the United States needs to be fair. Washington has no state income tax, so its government revenue comes from sales taxes, property taxes, and other taxes, meaning that low- and middle-income Washington taxpayers pay a large portion of their income in state taxes. According to state Rep. Noel Frame, who introduced the bill, Washington’s lowest-earning residents paid 18% of their income in state taxes. The top 1% earners pay just 6% of their income in state taxes. Frame believes that by only taxing financial assets, the state avoids the complex issue of trying to apply value and then tax art, real estate and other assets that can be difficult to value.
Although according to the Washington Department of Revenue, Bezos, Scott, Gates, and Ballmer would certainly bear the brunt of the tax, Washington has 100 billionaires who will share the tax. We are not sure if the Department of Revenue is coming up with that number according to our estimate, Washington State has just 12 billionaires. Delegate Frame also does not believe that billionaires such as Bezos and Ballmer would leave the state simply because of the tax.
The frame may not be effective in how the world has changed how we do business during the coronovirus epidemic. Working from home has led to ways of doing things differently and people do not need to be in the office to attend meetings or be productive. This makes it easier for these billionaires to decide to leave Washington and its proposed money tax only if it suits them. People have flexibility with their jobs and commitments that we did not have a year ago, and exactly what happens if this wealth is taxed, lawmakers may be surprised.