It’s tough to feel pity for billionaires — particularly those who see billions and billions stream into their bank accounts by the day — paying hefty taxes.
And that’s what lawmakers in Olympia are counting on in proposing a tax targeting billionaires. The general public is gonna love it, right?
But it’s not that simple. Taxes are supposed to be imposed equally according to the state constitution.
So, at least on the surface, targeting a few billionaires would seem to be unconstitutional. The state Supreme Court, of course, will ultimately make that call.
Beyond that, these billionaires could well be moving targets. Given their wealth, they can easily relocate to another state to avoid paying this tax, even if it’s just on principle. Nobody likes to be strong-armed.
Under the proposal, House Bill 1406, a 1% tax would be levied on a state residents’ taxable intangible wealth above $1 billion. According to a legislative analysis of the proposal, worldwide intangible assets would be taxed and they include cash, financial instruments like stocks, bonds, contracts, commodities and pension funds.
The analysis estimates this would bring in $4.95 billion in the 2023-35 budget cycle, which is about 10% of the existing two-year state operating budget of $52.4 billion.
Seattle Times columnist Danny Westneat wrote recently that, according to Forbes magazine, 14 billionaires live in Washington state.
And only four of those are crazy rich — Jeff Bezos, Bill Gates, Steve Ballmer and MacKenzie Scott.
“By my estimate, about 97% of the tax burden would fall on these four people,” Jared Walczak, an analyst at a policy group called the Tax Foundation, told Westneat.
Bezos, Gates, Ballmer and Scott have all been generous with their money. Scott recently donated $15 million to Walla Walla Community College.
So, does it make sense for the state government to put the squeeze on philanthropic billionaires who live in our state and help plenty of worthy organizations?
That’s why state lawmakers need to ask themselves as they take this Robin Hood-approach to taxation.
In the long run it might hurt Washington state more than it helps it even if it is ruled constitutional.
Bezos, Gates, Ballmer and Scott are, let’s say, golden geese for this state. Do we really want to force them to fly south or east?