Your Hometown News Source
Your Hometown News Source
By Chris Corry
SEATTLE–Jeff Bezos is trading the shores of Lake Washington for the beaches of South Florida. The announcement of his move has made news for various reasons but most notable is the impact of the recently enacted Washington "excise tax" on capital gains would have on the Amazon Founder.
As noted by our friends at the Tax Foundation, Jeff Bezos sold about $15 billion in stocks before the new law took effect, potentially saving over $1 billion in taxes. Moving his primary residency to Florida would ensure that any future stock sales would not be subject to the excise tax.
For every $1 billion sold, he would pay Washington $70 million dollars. With an estimated share of over $130 billion, that can really add up.
The capital gains tax isn't the only enacted or potential taxes Jeff Bezos would avoid. The proposed wealth tax would levy a 1% tax on financial assets, excluding the first $250 million. This would mean an annual tax of over $1 billion on just the Amazon holdings. The current estate tax would take 20% on his estate upon his death.
What does this all mean for Washington State? Taxes have consequences.
For every Jeff Bezos or Fisher Investments that makes headlines for moving, there are many more who quietly leave the state. Washington's competitive advantage for decades was its lack of an income tax. People and businesses will continue to leave for more tax-friendly states. This shouldn't be a surprise to anyone.
Washington shouldn't build its financial future on risky and volatile taxes like the Washington capital gains excise tax. This move highlights an inherent flaw in taxes that target individuals and businesses.
-Corry is Director, Center for Government Reform, and can be emailed at [email protected].
