A bill that would impose a 1 percent tax on Washington residents worth more than $1 billion was introduced in the House Finance Committee this week, to mixed reactions from lawmakers.
Rep. Sharon Wylie, the Democrat from Vancouver who serves on the committee, projected tentative support for the idea of a so-called “billionaire tax.” With the bill still in its earliest stages, however, she said she’d wait to see any amendments before announcing how she’ll vote.
“I will support almost anything that will move us in a less regressive tax system that has enough votes to pass,” Wylie said Wednesday. “It will affect very few people who are extremely wealthy.”
Rep. Noel Frame, D-Seattle, introduced HB 1406 on Tuesday. Imposing a 1 percent tax on the state’s billionaires would bring in around $2.5 billion annually, she said, and affect fewer than 100 people. Their first $1 billion would remain exempt.
According to Forbes magazine’s ranking of the 400 wealthiest people in the country, nine of them live in the state. The top of the list includes Washingtonians Jeff Bezos (worth $179 billion as of June), Bill Gates ($111 billion) and Mackenzie Scott ($57 billion). Ken Fisher, the financier from Camas, also made the list with $4.3 billion in assets.
“In Washington state, if your family makes $24,000 a year or less, you’re paying six times more in taxes as a share of your income than the highest-earning household,” Frame, the committee chair, said in the hearing Tuesday. “Even if you’re middle class, and you’re making closer to $70,000, you’re still paying four times more in taxes.”
Frame went on to call the current tax code “unconscionable, unacceptable and frankly, unsustainable.”
According to the state Department of Revenue, about 100 Washington taxpayers have wealth in excess of $1 billion. The tax would not be levied on income, but rather intangible financial assets including stocks, bonds, cash and publicly traded options.
Twenty-six House Democrats have sponsored the bill. None of the initial sponsors hail from Southwest Washington.
While the bill doesn’t establish a specific recipient of the proposed tax’s revenue, one possible option on the table is a low-income tax credit. Wylie said she would support that use of the funds, pointing to the cumbersome, expensive bureaucracies that dictate eligibility for food stamps and income support.
“There’s growing consensus that we could save money and do more good with some direct distribution method,” Wylie said. “There’s more and more talk about that, in both a financially responsible way and an ethically responsible way.”
Wylie also said she regards claims raised by a few Republican lawmakers during the hearing — that taxing the wealthiest people will force them out of the state — with some skepticism.
“I think that you can’t rule it out, that someone’s not going to make a decision and say it’s because of that,” Wylie said. “(But) I doubt that someone’s who fully ensconced in the state and has that much wealth … that this alone will be enough to leave the state? I don’t buy it.”
Rep. Brandon Vick, a Republican from Southwest Washington who also serves on the House Finance Committee, did not respond to The Columbian’s emailed request for comment.
In a Jan. 22 media release describing his priorities for the ongoing session, Vick criticized the majority party for introducing legislation that would implement additional taxes on carbon and capital gains. He didn’t specifically address a billionaire tax.
“Republicans continue to offer real solutions that are fiscally responsible and do not raise taxes,” Vick said.