Jeff Bezos will have to pay $ 2 billion in income tax to the budget of Washington
Billionaire will be required to pay $ 2 billion in income taxes a year if Washington imposes a wealth tax on state residents.
According to the submitted bill, Jeff Bezos will have to pay about $ 2 billion a year in state income tax in line with Washington’s proposed wealth tax.
As part of efforts to reduce social inequality, Washington state legislators are proposing a 1% tax on wealth over $ 1 billion. Legislators say the tax will generate about $ 2.5 billion in revenue per year and will only apply to so-called intangible financial assets or financial investments. such as stocks or options.
Sanders’ proposed tax bill on billionaires could cost Jeff Bezos $43 billion, Elon Musk $28 billion
Still, tax experts say the state’s wealth tax would be prohibitively high for the four billionaires who call Washington their home: Bezos, Bill Gates, Mackenzie Scott and Steve Ballmer.
Jared Walczak from the Tax Fund wrote that 97% of tax revenue will come from these four billionaires. Bezos, who is currently worth about $ 200 billion, will owe about $ 2 billion a year under the new tax. Gates, who is worth about $ 135 billion, will pay about $ 1.3 billion, while Ballmer will have to pay about $ 870 million. Scott, Bezos’s ex-wife, would have to pay around $ 600 million a year.
According to critics, since none of «big four» Washington does not perform day-to-day corporate functions, they may simply move to another state to avoid paying taxes. State tax experts admit Bezos, who just stepped down as Amazon CEO, or other billionaires leave as total taxes due from them exceed $ 2.5 billion forecast.
Walczak said any of these people can move to another state, making it their primary residence, and still spend up to 182 days a year in Washington state and avoid paying taxes..
«This will not only prevent the payment of wealth tax, but also deprive the state of other income, – said Walczak. “These wealthy residents still pay a disproportionate share of state and local taxes and contribute significantly to the local economy. Their outcome would have serious consequences, in addition to refusing to introduce a new tax.».
Proponents say the wealth tax is necessary to ensure fairness in the country’s most unequal tax system. Because the state has no income tax and increases government revenues from sales taxes, property taxes, and other taxes, they said, low- and middle-income taxpayers pay a large share of their income in government taxes..
Noel Frame, the state representative who introduced the bill argues that people with the lowest income pay 18% of their income in state taxes, and the 1% of the population with the highest income pay 6% of their income in state taxes.
«We have a completely unfair tax code, ”said Frame. – I just don’t think it’s more acceptable».
Frame said that by taxing only financial assets, a wealth tax in Washington avoids the problem of taxing assets such as art, real estate, collectibles, and other assets that are difficult to value..
While the Big Four will bear the brunt of the tax, the state revenue department estimates there are nearly 100 billionaires in the state who could pay the tax by sharing the risks. Forbes estimates there are about a dozen billionaires in Washington.
With the exception of Bezos, experts say the rest of Washington’s billionaires have strong ties to the state..
«The idea that they will just pack up and leave is a cynical point of view and not supported by evidence», – said Frame, citing research that said raising taxes for the rich did not lead to more than expected increases in the emigration of millionaires and high-paid professionals.
Yet a tax focused on only a handful of mega-billionaires may be different.. Orion Hindawi, co-founder and CEO of Tanium, who recently moved his family and his company to Washington from California, said during an interview with the Washington Technology Industry Association that the state would lose competitiveness if it raised taxes for the rich.
Thanks to remote meetings and online productivity, he says, employees and leaders are no longer tied to the same city or state as they once were. He said that the wealth tax would be viewed by his colleagues as «slander».
«The reality of the situation is that people in Washington State have flexibility that they did not have a year ago, and that is constant flexibility.», – said Hindawi. According to him, high-income and flexible employees «are mostly nation states in their own right. They can move wherever they want and it’s trivial».