A state that houses some of America’s wealthiest tycoon’s including Bill Gates and Jeff Bezos, a Washington lawmaker has proposed a bill that would pay a wealth tax on some financial assets.
Claiming that she is seeking a fair tax code at a time when so many people are struggling due to the pandemic, Democratic Rep. Noel Frame of Seattle, said the measure isn’t an attack on the state’s richest residents. “It actually really isn’t about them, it’s about the working people of Washington who right now are disproportionately paying for community investments like public education, public health, you name it,” she said. “This is about equity in the tax code.”
According to the proposed bill, a 1% tax would be levied on “extraordinary” intangible financial assets including cash, publicly-traded options, futures contracts, and stocks and bonds — but not income. The first $1 billion in value would be exempt from the tax that would apply to residents’ taxable worldwide wealth.
This being said, about 100 taxpayers in Washington have wealth in excess of $1 billion, according to the state Department of Revenue, but no state currently has a wealth tax, according to Jackson Brainerd, a senior policy specialist with the National Conference of State Legislatures. The Washington state measure “would be the first of its kind if it passes,” he said.
Meanwhile, on similar lines in New York, Governor Andrew Cuomo is proposing to raise income taxes on the wealthiest residents but has called legislative proposals there to tax billionaire’s assets “unconstitutional.”
The measure received its first public hearing Tuesday before the House Finance Committee, where Frame serves as chairwoman. Frame is joined by 25 other House Democrats who have signed on in support of the bill, though legislative leaders in the chamber have said it’s too early to know if it will pass.
Among those who stood against the proposition was Republican Rep. Drew Stokesbary, a fellow member of the committee considering the bill, who called the measure “a pretty bad idea,” saying that in addition to constitutional issues with targeting one segment of taxpayers over another, billionaires could just choose to move to avoid the tax. “It sets a very troubling precedent,“ he said. ”If 7 million Washingtonians gang up on the nine richest this year, what’s to stop us from ganging up on the next thousand richest the next year and so on.”